BEACHWOOD, Ohio, Feb. 12,
2014 /PRNewswire/ -- DDR Corp. (NYSE: DDR) today announced
operating results for the fourth quarter and year ended
December 31, 2013.
(Logo: http://photos.prnewswire.com/prnh/20131217/DDRLOGO )
SIGNIFICANT FOURTH QUARTER ACTIVITY
- Generated Operating FFO of $0.29
per diluted share for the fourth quarter, an increase of 7.4%
compared to the fourth quarter of 2012
- Executed 384 new leases and renewals for 2.5 million square
feet
- Increased the portfolio leased rate by 30 basis points to 95.1%
at December 31, 2013 from 94.8% at
September 30, 2013
- Generated positive leasing spreads with new leases up 13.9% at
100% ownership and 20.7% on a pro rata basis, and renewals up 8.0%
at 100% ownership and 7.9% on a pro rata basis; blended spreads
were up 9.2% at 100% ownership and 10.0% on a pro rata basis
- Generated same store net operating growth of 3.4% at 100%
ownership and 3.1% on a pro rata basis compared to the prior
year
- Acquired sole ownership of 30 prime power centers from an
existing joint venture with Blackstone Real Estate Partners VII for
$1.46 billion
- Issued $300 million of 3.50%
senior unsecured notes due 2021
- Closed on the forward issuance of $664
million of common equity to fund the net investment in prime
assets
- Completed the disposition of $184
million of non-prime assets; DDR's pro rata gross proceeds
were $98 million
2013 YEAR-END HIGHLIGHTS
- Generated Operating FFO of $1.11
per diluted share for the full year 2013, an increase of 7.8%
compared to 2012
- Executed 1,719 new leases and renewals for 10.3 million square
feet in 2013
- Increased the portfolio leased rate by 90 basis points from
94.2% at December 31, 2012
- Generated positive leasing spreads for the full year 2013, with
new leases up 12.2% at 100% ownership and 14.9% on a pro rata
basis, and renewals up 7.4% at 100% ownership and 7.6% on a pro
rata basis
- Generated same store net operating income growth of 3.3% at
100% ownership and 3.1% on a pro rata basis for the full year 2013
as compared to 2012
- Increased the total portfolio average annualized base rent per
occupied square foot to $14.18 as of
December 31, 2013 as compared to
$13.66 at December 31, 2012
"We are extremely pleased with the consistent operating
performance of our portfolio which led to high quality growth in
2013 and we expect operating metrics to accelerate further in
2014," commented DDR's chief executive officer, Daniel B. Hurwitz.
FINANCIAL HIGHLIGHTS
The Company's fourth quarter
Operating Funds From Operations attributable to common shareholders
("Operating FFO") increased to $104.5
million, or $0.29 per diluted
share, which compares to $84.0
million, or $0.27 per diluted
share, for the prior-year comparable period. The increase in
Operating FFO for the three-month period ended December 31, 2013, as compared to the same period
in 2012, primarily is due to organic growth as well as shopping
center acquisition transactions, partially offset by asset
dispositions.
Funds From Operations attributable to common shareholders
("FFO") for the three-month period ended December 31, 2013 increased to $120.2 million, or $0.33 per diluted share, which compares to
$61.8 million, or $0.20 per diluted share, for the prior-year
comparable period. The increase in FFO for the three-month
period ended December 31, 2013, as
compared to the same period in 2012, primarily is due to organic
growth and net shopping center acquisition activity as well as the
gain on change in control of interests recorded in the fourth
quarter of 2013.
Operating FFO for the year ended December
31, 2013 increased to $366.7
million, or $1.11 per diluted
share, which compares to $305.3
million, or $1.03 per diluted
share, for the prior year. The increase in Operating FFO for
the year ended December 31, 2013,
primarily is due to the same factors impacting Operating FFO for
the three-month period.
FFO for the year ended December 31,
2013 increased to $372.5
million, or $1.13 per diluted
share, which compares to $312.4
million, or $1.06 per diluted
share, for the prior year. The increase in FFO for the year
ended December 31, 2013, primarily is
due to the same factors impacting FFO for the three-month period,
as well as a reduction in impairment charges of non-depreciable
assets and the loss on debt retirement related to the Company's
repurchase of unsecured senior notes in 2012.
Net income attributable to common shareholders for the
three-month period ended December 31,
2013 was $0.6 million, or
$0.00 per diluted share, which
compares to net loss of $7.0 million,
or $0.02 per diluted share, for the
prior-year comparable period. Net loss attributable to common
shareholders for the year ended December 31,
2013 was $43.1 million, or
$0.14 per diluted share, which
compares to net loss of $60.3
million, or $0.21 per diluted
share, for the prior year. The change in net loss
attributable to common shareholders for the three-month period and
year ended December 31, 2013, is
primarily due to the same factors impacting FFO.
LEASING & PORTFOLIO OPERATIONS
The following
results for the full year and fourth quarter of 2013 highlight
continued strong leasing activity throughout the
portfolio:
- Executed 778 new leases aggregating 3.4 million square feet and
941 renewals aggregating approximately 6.9 million square feet, of
which 180 new leases aggregating approximately 0.8 million square
feet and 204 renewals aggregating approximately 1.7 million square
feet were executed in the fourth quarter
- Generated positive leasing spreads for the full year 2013, with
new leases up 12.2% at 100% ownership and 14.9% on a pro rata
basis, and renewals up 7.4% at 100% ownership and 7.6% on a pro
rata basis; blended spreads were up 8.3% at 100% ownership and 8.9%
on a pro rata basis
- Generated positive leasing spreads for the fourth quarter, with
new leases up 13.9% at 100% ownership and 20.7% on a pro rata
basis, and renewals up 8.0% at 100% ownership and 7.9% on a pro
rata basis; blended spreads were up 9.2% at 100% ownership and
10.0% on a pro rata basis
- The portfolio leased rate increased to 95.1% at December 31, 2013, as compared to 94.8% at
September 30, 2013 and 94.2% at
December 31, 2012
- Same store net operating income ("NOI") increased by 3.3% at
100% ownership for the full year 2013 and 3.4% for the fourth
quarter as compared to the same periods in 2012 and 3.1% on a pro
rata basis for both the full year and fourth quarter of
2013
- Total portfolio average annualized base rent per occupied
square foot as of December 31, 2013
was $14.18, as compared to
$13.66 at December 31, 2012
ACQUISITIONS & FINANCINGS
In October 2013, the Company acquired
sole ownership of a portfolio of 30 prime power centers that were
previously owned by an existing joint venture ("BRE JV") with
Blackstone Real Estate Partners VII L.P. ("Blackstone") for
$1.46 billion ($1.54 billion at 100%). The investment was
funded through a combination of proceeds from the issuance of new
common equity and unsecured debt that priced in May, preferred
equity and mezzanine loan repayments, and the assumption of
existing mortgage debt. The Company recorded a gain on change
in control and sale of interests of $18.8
million related to the transaction.
In November 2013, the Company
issued $300 million aggregate
principal amount of 3.50% senior unsecured notes due January
2021. Proceeds from the issuance were used to repay mortgage
debt assumed from the acquisition of assets from the BRE JV.
DISPOSITIONS
In the fourth quarter of 2013, the
Company sold 11 consolidated operating shopping centers,
aggregating approximately 0.9 million square feet, and consolidated
non-income producing assets generating gross proceeds of
approximately $81.8 million.
The Company recorded an aggregate net gain of approximately
$4.2 million related to these asset
sales. During the same period, the Company's unconsolidated
joint ventures sold five operating shopping centers, aggregating
approximately 1.1 million square feet, and non-income producing
assets generating gross proceeds of approximately $102.6 million, of which the Company's pro rata
share was $15.7 million. An
aggregate net gain of approximately $7.9
million was recorded related to these asset sales, of which
the Company's pro rata share was $1.9
million.
2014 GUIDANCE
There has been no change in Operating
FFO per share guidance since the initial release provided on
January 6, 2014. The Company
continues to estimate Operating FFO for 2014 between $1.17 and $1.21 per diluted
share.
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 (v) 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 above. The Company computes FFO in accordance with
the NAREIT definition. Other real estate companies may
calculate FFO and Operating FFO in a different manner.
Operating FFO 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,
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 and year
ended December 31, 2013. 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, 2012, as
amended. 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 CORP.
DDR is an owner and manager of 416
value-oriented shopping centers representing 116 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, as well
as on Twitter, LinkedIn and Facebook.
CONFERENCE CALL INFORMATION & SUPPLEMENTAL
MATERIALS
A copy of the Company's Supplemental
Financial/Operational package is available to all interested
parties upon request to Brooke
Vanek, 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,
February 13, 2014, at 10:00 a.m. Eastern Time. To participate,
please dial 877.703.6110 (domestic), or 857.244.7309
(international) at least ten minutes prior to the scheduled start
of the call. When prompted, provide the passcode:
55843186. Access to the live call and replay will also be
available through the Company's website. The replay will be
available through February 20,
2014.
DDR
Corp.
|
Financial
Highlights
|
(In
Thousands)
|
|
|
|
|
|
Three-Month
Periods
Ended December
31,
|
|
Years
Ended
December
31,
|
Revenues:
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Minimum
rents
|
$
177,827
|
|
$
136,410
|
|
$
608,419
|
|
$
516,997
|
Percentage and
overage rents
|
2,678
|
|
2,587
|
|
5,932
|
|
4,999
|
Recoveries from
tenants
|
59,154
|
|
44,913
|
|
198,404
|
|
167,248
|
Ancillary and other
property income
|
7,975
|
|
7,726
|
|
28,984
|
|
27,110
|
Management,
development and other fee income
|
8,966
|
|
10,579
|
|
40,160
|
|
43,706
|
Other
(A)
|
245
|
|
535
|
|
6,889
|
|
1,396
|
|
256,845
|
|
202,750
|
|
888,788
|
|
761,456
|
Expenses:
|
|
|
|
|
|
|
|
Operating and
maintenance
|
37,788
|
|
31,764
|
|
137,979
|
|
123,893
|
Real estate
taxes
|
35,582
|
|
26,874
|
|
117,374
|
|
99,086
|
Impairment charges
(B)
|
5,322
|
|
14,091
|
|
44,989
|
|
58,783
|
General and
administrative
|
20,432
|
|
19,753
|
|
79,556
|
|
76,444
|
Depreciation and
amortization
|
109,295
|
|
62,428
|
|
318,076
|
|
238,464
|
|
208,419
|
|
154,910
|
|
697,974
|
|
596,670
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
3,173
|
|
5,970
|
|
23,539
|
|
15,799
|
Interest expense
(C)
|
(63,738)
|
|
(54,120)
|
|
(228,869)
|
|
(213,261)
|
Loss on debt
retirement, net
|
—
|
|
—
|
|
—
|
|
(13,495)
|
Other income
(expense), net (D)
|
(3,341)
|
|
(10,726)
|
|
(6,629)
|
|
(17,826)
|
|
(63,906)
|
|
(58,876)
|
|
(211,959)
|
|
(228,783)
|
Loss before earnings
from equity method investments and other items
|
(15,480)
|
|
(11,036)
|
|
(21,145)
|
|
(63,997)
|
Equity in net income
of joint ventures
|
1,276
|
|
18,284
|
|
6,819
|
|
35,250
|
Impairment of joint
venture investments (B)
|
(980)
|
|
—
|
|
(980)
|
|
(26,671)
|
Gain (loss) on change
in control and sale of interests, net (E)
|
18,840
|
|
(1,866)
|
|
19,906
|
|
78,127
|
Tax expense of
taxable REIT subsidiaries and state franchise and income
taxes
|
(234)
|
|
(345)
|
|
(2,713)
|
|
(1,143)
|
Income from
continuing operations
|
3,422
|
|
5,037
|
|
1,887
|
|
21,566
|
Income (loss) from
discontinued operations (F)
|
3,905
|
|
(4,675)
|
|
(11,735)
|
|
(52,758)
|
Income (loss) before
gain (loss) on disposition of real estate
|
7,327
|
|
362
|
|
(9,848)
|
|
(31,192)
|
Gain (loss) on
disposition of real estate, net of tax
|
120
|
|
(298)
|
|
467
|
|
5,863
|
Net income
(loss)
|
7,447
|
|
64
|
|
(9,381)
|
|
(25,329)
|
Loss attributable to
non-controlling interests
|
(237)
|
|
(68)
|
|
(794)
|
|
(493)
|
Net income (loss)
attributable to DDR
|
$
7,210
|
|
$
(4)
|
|
$
(10,175)
|
|
$
(25,822)
|
Write-off of
preferred share original issuance costs
|
—
|
|
—
|
|
(5,246)
|
|
(5,804)
|
Preferred
dividends
|
(6,608)
|
|
(7,030)
|
|
(27,721)
|
|
(28,645)
|
Net income (loss)
attributable to common shareholders
|
$
602
|
|
$
(7,034)
|
|
$
(43,142)
|
|
$
(60,271)
|
Funds From
Operations ("FFO"):
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common shareholders
|
$
602
|
|
$
(7,034)
|
|
$
(43,142)
|
|
$
(60,271)
|
Depreciation and
amortization of real estate investments
|
107,158
|
|
63,577
|
|
314,720
|
|
242,822
|
Equity in net income
of joint ventures
|
(1,276)
|
|
(18,284)
|
|
(6,819)
|
|
(35,250)
|
Impairment of
depreciable joint venture investments
|
—
|
|
—
|
|
—
|
|
26,671
|
Joint ventures'
FFO
|
12,306
|
|
13,142
|
|
49,409
|
|
53,603
|
Non-controlling
interests (OP Units)
|
54
|
|
48
|
|
215
|
|
191
|
Impairment of
depreciable real estate assets
|
5,361
|
|
18,566
|
|
69,597
|
|
96,319
|
Gain on disposition
of depreciable real estate, net
|
(4,042)
|
|
(8,178)
|
|
(11,459)
|
|
(11,705)
|
FFO attributable
to common shareholders
|
120,163
|
|
61,837
|
|
372,521
|
|
312,380
|
Non-operating items,
net (G)
|
(15,667)
|
|
22,160
|
|
(5,854)
|
|
(7,062)
|
Operating
FFO
|
$
104,496
|
|
$
83,997
|
|
$
366,667
|
|
$
305,318
|
|
|
|
|
|
|
|
|
Earnings per share –
Diluted (H)
|
$
0.00
|
|
$
(0.02)
|
|
$
(0.14)
|
|
$
(0.21)
|
Funds From Operations
– Diluted (H)
|
$
0.33
|
|
$
0.20
|
|
$
1.13
|
|
$
1.06
|
Operating Funds From
Operations – Diluted (H)
|
$
0.29
|
|
$
0.27
|
|
$
1.11
|
|
$
1.03
|
DDR
Corp.
|
Financial
Highlights
|
(In
Thousands)
|
|
|
|
|
Selected Balance
Sheet Data
|
|
|
|
|
December 31,
2013
|
|
December 31,
2012
|
Assets:
|
|
|
|
Real estate and
rental property:
|
|
|
|
Land
|
$
2,209,970
|
|
$
1,900,401
|
Buildings
|
6,949,440
|
|
5,773,961
|
Fixtures and tenant
improvements
|
599,221
|
|
489,626
|
|
9,758,631
|
|
8,163,988
|
Less: Accumulated
depreciation
|
(1,823,199)
|
|
(1,670,717)
|
|
7,935,432
|
|
6,493,271
|
Land held for
development and construction in progress
|
452,980
|
|
475,123
|
Real estate held for
sale, net
|
12,670
|
|
—
|
Real estate,
net
|
8,401,082
|
|
6,968,394
|
|
|
|
|
Investments in and
advances to joint ventures
|
448,008
|
|
613,017
|
Cash
|
86,664
|
|
31,174
|
Restricted
cash
|
33,476
|
|
23,658
|
Notes receivable,
net
|
78,338
|
|
68,718
|
Receivables,
including straight-line rent, net
|
129,513
|
|
126,228
|
Other assets,
net
|
515,992
|
|
224,648
|
|
$
9,693,073
|
|
$
8,055,837
|
|
|
|
|
Liabilities &
Equity:
|
|
|
|
Indebtedness:
|
|
|
|
Revolving credit
facilities
|
$
29,133
|
|
$
147,905
|
Unsecured
debt
|
2,754,120
|
|
2,147,097
|
Unsecured term
loan
|
350,000
|
|
350,000
|
Mortgage and other
secured debt
|
2,161,421
|
|
1,674,141
|
|
5,294,674
|
|
4,319,143
|
Dividends
payable
|
55,107
|
|
44,210
|
Other
liabilities
|
415,413
|
|
326,024
|
Total
liabilities
|
5,765,194
|
|
4,689,377
|
|
|
|
|
Preferred
shares
|
405,000
|
|
405,000
|
Common
shares
|
35,938
|
|
31,524
|
Paid-in-capital
|
5,417,363
|
|
4,629,257
|
Accumulated
distributions in excess of net income
|
(1,915,638)
|
|
(1,694,822)
|
Deferred compensation
obligation
|
16,702
|
|
15,556
|
Accumulated other
comprehensive income
|
(36,493)
|
|
(27,925)
|
Less: Common
shares in treasury at cost
|
(18,211)
|
|
(16,452)
|
Non-controlling
interests
|
23,218
|
|
24,322
|
Total
equity
|
3,927,879
|
|
3,366,460
|
|
$
9,693,073
|
|
$
8,055,837
|
DDR
Corp.
|
Financial
Highlights
|
|
|
|
|
(A) Other revenues
were comprised of the following (in millions):
|
|
|
|
|
|
Three-Month
Periods
Ended December 31,
|
|
Years
Ended December
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Lease termination
fees
|
$ 0.1
|
|
$ 0.4
|
|
$ 6.3
|
|
$ 0.9
|
Other
miscellaneous
|
0.1
|
|
0.1
|
|
0.6
|
|
0.5
|
|
$ 0.2
|
|
$ 0.5
|
|
$ 6.9
|
|
$ 1.4
|
|
|
|
|
|
|
|
|
(B) The Company
recorded impairment charges on the following (in
millions):
|
|
|
|
|
|
Three-Month
Periods
Ended December 31,
|
|
Years Ended
December 31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
Land held for
development
|
$ —
|
|
$
2.1
|
|
$
—
|
|
$
10.1
|
Undeveloped
land
|
0.4
|
|
—
|
|
3.0
|
|
20.1
|
Assets marketed for
sale
|
4.9
|
|
12.0
|
|
42.0
|
|
28.6
|
Total continuing
operations
|
5.3
|
|
14.1
|
|
45.0
|
|
58.8
|
|
|
|
|
|
|
|
|
Sold assets —
discontinued operations
|
0.5
|
|
6.5
|
|
27.6
|
|
67.7
|
Joint venture
investments
|
1.0
|
|
—
|
|
1.0
|
|
26.7
|
Total impairment
charges
|
$ 6.8
|
|
$ 20.6
|
|
$ 73.6
|
|
$153.2
|
|
|
|
|
|
|
|
|
(C) The Company
recorded the following in connection with its outstanding
convertible debt (in millions):
|
|
|
|
|
|
Three-Month
Periods
Ended December 31,
|
|
Years
Ended
December
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Non-cash interest
expense related to amortization of the debt discount
|
$ 2.8
|
|
$ 2.6
|
|
$ 10.8
|
|
$ 10.9
|
|
|
|
|
|
|
|
|
(D) Other income
(expenses) were comprised of the following (in
millions):
|
|
|
|
|
|
Three-Month
Periods
Ended December 31,
|
|
Years
Ended
December
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Transaction and other
(expenses) income
|
$
(2.3)
|
|
$
(4.8)
|
|
$ (4.7)
|
|
$
(7.7)
|
Litigation-related
expenses
|
(1.0)
|
|
(1.2)
|
|
(2.2)
|
|
(4.7)
|
Reserve of mezzanine
note receivable
|
—
|
|
(4.3)
|
|
—
|
|
(4.3)
|
Debt extinguishment
(costs) gain, net
|
—
|
|
(0.4)
|
|
0.3
|
|
(1.1)
|
|
$ (3.3)
|
|
$ (10.7)
|
|
$ (6.6)
|
|
$ (17.8)
|
|
|
|
|
|
|
|
|
(E) In the fourth
quarter of 2013, the Company acquired its partner's interests in
the BRE JV. The Company accounted for this transaction as a step
acquisition. Due to the change in control that occurred, the
Company recorded an aggregate gain associated with the difference
between the Company's carrying value and fair value of the
previously held equity interest.
|
|
|
|
|
|
|
|
|
(F) The operating
results related to assets classified as discontinued operations are
summarized as follows (in millions):
|
|
|
|
|
|
Three-Month
Periods
Ended December
31,
|
|
Years
Ended
December
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Revenues from
operations
|
$
2.4
|
|
$
8.7
|
|
$
22.4
|
|
$
48.2
|
|
|
|
|
|
|
|
|
Operating
expenses
|
0.8
|
|
2.7
|
|
6.8
|
|
14.4
|
Impairment
charges
|
0.5
|
|
6.5
|
|
27.6
|
|
67.7
|
Interest,
net
|
0.5
|
|
2.1
|
|
5.0
|
|
10.1
|
Depreciation and
amortization
|
0.7
|
|
2.8
|
|
6.0
|
|
12.6
|
Total
expenses
|
2.5
|
|
14.1
|
|
45.4
|
|
104.8
|
Loss before gain on
disposition of real estate
|
(0.1)
|
|
(5.4)
|
|
(23.0)
|
|
(56.6)
|
Gain on disposition
of real estate, net
|
4.0
|
|
0.7
|
|
11.3
|
|
3.8
|
Net income
(loss)
|
$ 3.9
|
|
$ (4.7)
|
|
$ (11.7)
|
|
$ (52.8)
|
|
|
|
|
|
|
|
|
(G) The gains and
charges excluded from Operating FFO for the three-month periods and
years ended December 31, 2013 and 2012, respectively, are
summarized as follows (in millions):
|
|
|
|
|
|
Three-Month
Periods
Ended December
31,
|
|
Years
Ended
December
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Non-cash impairment
charges – non-depreciable assets
|
$
1.4
|
|
$
2.1
|
|
$
4.0
|
|
$
30.2
|
Loss on debt
retirement
|
—
|
|
—
|
|
—
|
|
13.5
|
Other expense, net –
transaction costs, litigation costs, debt extinguishment costs,
reserve of mezzanine note receivable and other expenses
|
2.0
|
|
10.7
|
|
6.1
|
|
18.9
|
Equity in net
(income) loss of joint ventures – currency adjustments, debt
extinguishment costs, transaction costs, gain on sale of land and
other expenses
|
(0.2)
|
|
(0.2)
|
|
(0.9)
|
|
0.6
|
Non-cash (gain) loss
on disposition of non-depreciable real estate, net
|
(0.1)
|
|
0.3
|
|
(0.3)
|
|
(5.5)
|
Non-cash (gain) loss
on change in control and sale of interests
|
(18.8)
|
|
9.3
|
|
(19.9)
|
|
(70.8)
|
Non-cash loss on debt
extinguishment – discontinued operations
|
—
|
|
—
|
|
—
|
|
0.2
|
Non-cash write-off of
preferred share original issuance costs
|
—
|
|
—
|
|
5.2
|
|
5.8
|
Total adjustments
from FFO to Operating FFO
|
$ (15.7)
|
|
$ 22.2
|
|
$
(5.8)
|
|
$ (7.1)
|
(H) The Company's per
share information is as follows:
|
|
|
|
|
At December
31,
|
|
2013
|
|
2012
|
Common shares
outstanding
|
359.2
|
|
315.1
|
OP Units outstanding
("OP Units")
|
0.4
|
|
0.4
|
|
Three-Month
Periods
Ended December
31,
|
|
Years
Ended
December
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
Earnings per
common share:
|
|
|
|
|
|
|
|
Basic
|
$ 0.00
|
|
$ (0.02)
|
|
$ (0.14)
|
|
$ (0.21)
|
Diluted
|
$ 0.00
|
|
$ (0.02)
|
|
$ (0.14)
|
|
$ (0.21)
|
Basic and diluted –
average shares outstanding
|
356.9
|
|
307.9
|
|
326.4
|
|
291.7
|
Dividends
Declared:
|
$ 0.135
|
|
$
0.12
|
|
$
0.54
|
|
$
0.48
|
|
|
|
|
|
|
|
|
FFO per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.33
|
|
$
0.20
|
|
$
1.13
|
|
$
1.06
|
Diluted
|
$
0.33
|
|
$
0.20
|
|
$
1.13
|
|
$
1.06
|
Weighted average
common shares outstanding
|
358.9
|
|
310.0
|
|
328.5
|
|
293.6
|
Assumed conversion of
OP Units
|
0.4
|
|
0.4
|
|
0.4
|
|
0.4
|
FFO Weighted average
common shares and OP Units – Basic
|
359.3
|
|
310.4
|
|
328.9
|
|
294.0
|
Assumed conversion of
dilutive securities
|
0.4
|
|
0.4
|
|
0.5
|
|
1.3
|
FFO Weighted average
common shares and OP Units – Diluted
|
359.7
|
|
310.8
|
|
329.4
|
|
295.3
|
|
|
|
|
|
|
|
|
Operating
FFO:
|
|
|
|
|
|
|
|
Diluted
|
$
0.29
|
|
$
0.27
|
|
$
1.11
|
|
$
1.03
|
Operating FFO
Weighted average common shares and OP Units – Diluted
|
359.7
|
|
310.8
|
|
329.4
|
|
295.3
|
DDR
Corp.
|
Summary Results of
Combined Unconsolidated Joint Ventures
|
(In
Thousands)
|
|
|
|
|
Combined condensed
income statements
|
|
|
|
|
|
|
|
|
Three-Month
Periods
Ended December
31,
|
|
Years
Ended
December
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Revenues:
|
|
|
|
|
|
|
|
Minimum
rents
|
$ 113,026
|
|
$ 129,995
|
|
$
501,592
|
|
$ 480,035
|
Percentage and
overage rents
|
860
|
|
700
|
|
2,313
|
|
1,141
|
Recoveries from
tenants
|
23,714
|
|
30,629
|
|
119,467
|
|
108,295
|
Other
|
19,175
|
|
17,410
|
|
68,996
|
|
77,480
|
|
156,775
|
|
178,734
|
|
692,368
|
|
666,951
|
Expenses:
|
|
|
|
|
|
|
|
Operating and
maintenance
|
35,579
|
|
39,993
|
|
160,551
|
|
159,628
|
Real estate
taxes
|
14,516
|
|
20,081
|
|
76,987
|
|
70,871
|
Net operating
income
|
106,680
|
|
118,660
|
|
454,830
|
|
436,452
|
Impairment charges
(A)
|
26,729
|
|
—
|
|
86,346
|
|
840
|
Depreciation and
amortization of real estate investments
|
46,598
|
|
50,939
|
|
222,756
|
|
190,514
|
Interest
expense
|
51,781
|
|
56,713
|
|
224,133
|
|
220,612
|
(Loss) income before
other items
|
(18,428)
|
|
11,008
|
|
(78,405)
|
|
24,486
|
Income tax
expense
|
(7,254)
|
|
(6,715)
|
|
(27,553)
|
|
(25,444)
|
(Loss) income from
continuing operations
|
(25,682)
|
|
4,293
|
|
(105,958)
|
|
(958)
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Loss from
operations
|
(400)
|
|
(13,421)
|
|
(14,567)
|
|
(71,787)
|
Gain (loss) on
disposition, net
|
7,944
|
|
10,449
|
|
(19,190)
|
|
11,739
|
(Loss) income before
gain on disposition of assets
|
(18,138)
|
|
1,321
|
|
(139,715)
|
|
(61,006)
|
Gain on disposition
of assets, net
|
—
|
|
40,352
|
|
794
|
|
54,582
|
Net (loss)
income
|
$ (18,138)
|
|
$
41,673
|
|
$
(138,921)
|
|
$
(6,424)
|
Non-controlling
interests
|
(6,290)
|
|
(23,306)
|
|
(26,005)
|
|
(42,995)
|
Net (loss) income
attributable to unconsolidated joint ventures
|
$ (24,428)
|
|
$
18,367
|
|
$
(164,926)
|
|
$
(49,419)
|
Net (loss) income at
DDR's ownership interests
|
$
(1,014)
|
|
$
21,774
|
|
$
3,314
|
|
$
33,512
|
Basis
differences
|
2,290
|
|
(3,490)
|
|
3,505
|
|
1,738
|
Equity in net income
of joint ventures
|
$
1,276
|
|
$
18,284
|
|
$
6,819
|
|
$
35,250
|
FFO at DDR's
ownership interests (B)
|
$
12,306
|
|
$
13,142
|
|
$
49,409
|
|
$
53,603
|
Operating FFO at
DDR's ownership interests (B)
|
$
12,087
|
|
$
12,982
|
|
$
48,500
|
|
$
54,220
|
DDR
Corp.
|
Summary Results of
Combined Unconsolidated Joint Ventures
|
(In
Thousands)
|
|
|
|
|
Combined condensed
balance sheets
|
|
|
|
|
|
|
|
|
December 31,
2013
|
|
December 31,
2012
|
|
|
|
|
Land
|
$
1,275,232
|
|
$
1,569,548
|
Buildings
|
3,940,806
|
|
4,681,462
|
Fixtures and tenant
improvements
|
266,851
|
|
244,293
|
|
5,482,889
|
|
6,495,303
|
Less: Accumulated
depreciation
|
(839,867)
|
|
(833,816)
|
|
4,643,022
|
|
5,661,487
|
Land held for
development and construction in progress (C)
|
116,088
|
|
348,822
|
Real estate,
net
|
4,759,110
|
|
6,010,309
|
Cash and restricted
cash
|
282,866
|
|
467,200
|
Receivables,
including straight-line rent, net
|
101,003
|
|
99,098
|
Other assets,
net
|
196,615
|
|
427,014
|
|
$
5,339,594
|
|
$
7,003,621
|
|
|
|
|
Mortgage debt
(D)
|
$
3,282,643
|
|
$
4,246,407
|
Notes and accrued
interest payable to DDR
|
127,679
|
|
143,338
|
Other
liabilities
|
245,368
|
|
342,614
|
|
3,655,690
|
|
4,732,359
|
Redeemable preferred
equity
|
71,771
|
|
154,556
|
Accumulated
equity
|
1,612,133
|
|
2,116,706
|
|
$
5,339,594
|
|
$
7,003,621
|
DDR Corp.
|
Summary Results of
Combined Unconsolidated Joint Ventures
|
|
|
|
|
(A) For the
three-month period and year ended December 31, 2013, the Company's
proportionate share of impairment charges recorded was
approximately $3.2 million and $10.6 million,
respectively.
|
|
|
|
|
|
|
|
|
(B) FFO and Operating
FFO from unconsolidated joint ventures are summarized as follows
(in millions):
|
|
|
|
|
|
Three-Month
Periods
Ended December
31,
|
|
Years
Ended
December
31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Net (loss) income
attributable to unconsolidated joint ventures
|
$ (24.4)
|
|
$ 18.4
|
|
$ (164.9)
|
|
$
(49.4)
|
Depreciation and
amortization of real estate investments
|
45.7
|
|
71.0
|
|
226.6
|
|
228.7
|
Impairment of
depreciable real estate assets
|
26.7
|
|
9.6
|
|
93.2
|
|
57.2
|
(Gain) loss on sale
of depreciable real estate
|
(7.9)
|
|
(50.7)
|
|
18.7
|
|
(65.1)
|
FFO
|
$
40.1
|
|
$
48.3
|
|
$
173.6
|
|
$ 171.4
|
FFO at DDR ownership
interests
|
$
12.3
|
|
$
13.1
|
|
$
49.4
|
|
$
53.6
|
Operating FFO at
DDR's ownership interests (1)
|
$
12.1
|
|
$
13.0
|
|
$
48.5
|
|
$
54.2
|
DDR joint venture
distributions received, net
|
$
6.3
|
|
$
23.3
|
|
$
25.0
|
|
$
43.2
|
|
|
|
|
|
|
|
|
(1) Excluded from
Operating FFO is the Company's proportionate share of net activity
related to foreign currency adjustments, debt extinguishments gains
and losses and other expenses as disclosed above in this press
release in Note G.
|
(C) The Company's
proportionate share of land held for development and construction
in progress is as follows (in millions):
|
|
|
|
|
|
December
31,
2013
|
|
December 31,
2012
|
Company's
proportionate share
|
$ 25.4
|
|
$ 100.9
|
|
|
|
|
|
|
|
|
(D) Mortgage debt
consists of the following (in millions):
|
|
|
|
|
|
December
31,
2013
|
|
December 31,
2012
|
Company's
proportionate share
|
$ 630.1
|
|
$ 724.9
|
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
|
20.9
|
|
48.2
|
SOURCE DDR Corp.