OAK BROOK, Ill., Feb. 17, 2015 /PRNewswire/ -- Retail
Properties of America, Inc. (NYSE: RPAI) (the "Company")
today reported financial and operating results for the quarter and
year ended December 31, 2014.
FINANCIAL RESULTS
For the quarter ended December 31,
2014, the Company reported:
- Operating Funds From Operations (Operating FFO) of $62.7 million, or $0.27 per share, compared to $70.7 million, or $0.30 per share, for the same period in
2013;
- Funds From Operations (FFO) of $61.2
million, or $0.26 per share,
compared to $71.8 million, or
$0.30 per share, for the same period
in 2013;
- Net income attributable to common shareholders of $23.5 million, or $0.10 per share, compared to $34.7 million, or $0.15 per share, for the same period in
2013.
For the year ended December 31,
2014, the Company reported:
- Operating FFO of $257.2 million,
or $1.09 per share, compared to
$246.8 million, or $1.05 per share, for 2013;
- FFO of $255.7 million, or
$1.08 per share, compared to
$266.7 million, or $1.14 per share, for 2013;
- Net income attributable to common shareholders of $33.9 million, or $0.14 per share, compared to $4.2 million, or $0.02 per share, for 2013.
OPERATING RESULTS
For the quarter ended December 31,
2014, the Company's portfolio results were as follows:
- 1.3% increase in same store net operating income (NOI) over the
comparable period in 2013, based on same store occupancy of 94.6%
at December 31, 2014, up 90 basis
points from 93.7% at September 30,
2014 and December 31,
2013;
- Total portfolio percent leased, including leases signed but not
commenced: 95.6% at December 31,
2014, up 60 basis points from 95.0% at September 30, 2014 and up 90 basis points from
94.7% at December 31, 2013;
- Retail portfolio percent leased, including leases signed but
not commenced: 95.4% at December 31,
2014, up 70 basis points from 94.7% at September 30, 2014 and up 100 basis points from
94.4% at December 31,
2013;
- 732,000 square feet of retail leasing transactions comprised of
139 new and renewal leases;
- Positive comparable cash leasing spreads of 2.0%.
For the year ended December 31,
2014, the Company's portfolio results were as follows:
- 3.3% increase in same store NOI over the comparable period in
2013;
- 3,965,000 square feet of retail leasing transactions comprised
of 711 new and renewal leases;
- Positive comparable cash leasing spreads of 5.3%.
"RPAI posted another exceptional year, meeting or exceeding our
financial, operational and transactional objectives," stated
Steve Grimes, president and chief
executive officer. "Looking forward, we expect 2015 to be a year of
significant progress for the Company in which we will substantially
improve our concentration in our target markets and proactively
address longer term risks to our tenant base through the strategic
remerchandising of anchor space, all while continuing to enhance
our balance sheet strength and flexibility. We are off to a very
strong start, with the announcement of nearly $375 million of acquisition activity that has
already closed or been placed under contract."
2014 INVESTMENT ACTIVITY
In 2014, the Company continued to make substantial progress
refining its portfolio with total transaction activity of
$613.3 million, including the
Company's pro rata share of unconsolidated joint ventures,
consisting of $289.6 million of
acquisitions and $323.7 million of
dispositions.
Acquisitions
In 2014, the Company completed
$289.6 million of acquisitions,
including the Company's pro rata share of unconsolidated joint
ventures. During the quarter, the Company acquired Avondale Plaza ("Avondale") through an
off-market negotiation, on an unencumbered basis, for a gross
purchase price of $15.1
million. Avondale is a 39,000 square foot
grocery-anchored shopping center located in the Seattle
Metropolitan Statistical Area ("MSA"). The property is 100%
occupied and is anchored by PCC Natural Markets, a certified
organic grocer.
Additionally, during the quarter, the Company acquired a parcel
at one of its existing power centers, on an unencumbered basis, for
a gross purchase price of $5.8
million. The 44,000 square foot parcel is located at
Lakewood Towne Center in the Seattle MSA and is occupied by
Marshalls, Dollar Tree and Great Clips.
Dispositions
In 2014, the Company completed $323.7
million of dispositions, of which $154.3 million closed in the fourth quarter.
During the quarter, the Company sold 14 assets which included seven
non-strategic multi-tenant retail assets for $117.7 million, six single-user retail assets for
$25.1 million and one industrial
asset for $11.5 million. Subsequent
to year end, the Company sold one office asset, which was
classified as held for sale at December 31,
2014, for $17.2 million.
2015 ACQUISITION ACTIVITY
In 2015, the Company has continued to execute on its investment
strategy of acquiring high quality, multi-tenant retail assets in
its target markets, with total acquisitions closed or under
contract of $373.1 million. These
assets are located in the Washington,
D.C., Austin and Seattle
MSAs, strengthening the Company's multi-tenant retail footprint in
its target markets by 847,000 square feet. The properties possess
strong demographic profiles, with weighted average household income
of $135,000 and weighted average
population of 105,000 within a three-mile radius.
Washington, D.C.
MSA
As previously announced, subsequent to year end, the
Company acquired the retail portion of Downtown Crown, Merrifield
Town Center and Fort Evans Plaza II, all on an unencumbered basis,
for a gross purchase price of $284.3
million. In addition, the Company entered into a purchase
agreement to acquire Tysons Corner ("Tysons") through an off-market
negotiation, on an unencumbered basis, for a gross purchase price
of $31.7 million. Tysons is comprised
of 38,000 square feet and is anchored by Golfsmith, with national
fast-casual tenant offerings including, Chipotle, Chick-fil-A and
Roti. The property sits in an affluent and dense trade area and is
adjacent to the Silver Line Metrorail. The transaction is expected
to close during the first quarter of 2015, subject to satisfaction
of customary closing conditions.
As a result of these transactions, the Company will own three
million square feet in the Washington,
D.C./Baltimore MSAs, with strong portfolio trade area
demographics, including weighted average household income of
$110,000 and weighted average
population of 99,000 within a three-mile radius.
Austin and Seattle
MSAs
The Company entered into a purchase agreement to acquire Cedar Park
Town Center ("Cedar Park"), on an
unencumbered basis, for a gross purchase price of $39.1 million. Cedar
Park is a 182,000 square foot community center located in
the Austin MSA. The property is situated at the intersection of two
major freeways, with visibility and access to more than 73,000
vehicles per day. Cedar Park is
shadow-anchored by Costco and is 94.5% occupied and leased to an
impressive mix of national and regional retail tenants, including
At Home, Chipotle, BJ's Brewhouse and In-N-Out Burger. The
transaction is expected to close during the first quarter of 2015,
subject to satisfaction of customary closing conditions.
In addition, the Company entered into a purchase agreement to
acquire a grocery-anchored shopping center in the Seattle MSA
through an off-market negotiation, on an unencumbered basis, for a
gross purchase price of $18.0
million. The transaction is expected to close during the
second quarter of 2015, subject to satisfaction of customary
closing conditions.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of December 31, 2014, the Company
had $2.3 billion of consolidated
indebtedness, which resulted in a net debt to adjusted EBITDA ratio
of 5.8x, or a net debt and preferred stock to adjusted EBITDA ratio
of 6.1x. Consolidated indebtedness had a weighted average
contractual interest rate of 5.03% and a weighted average maturity
of 4.3 years.
During 2014, the Company executed on significant capital markets
initiatives, including the following:
- In January, received its first investment grade credit rating
of (P)Baa3 with a stable outlook from Moody's Investors
Service;
- In May, closed its inaugural private placement unsecured notes
offering to institutional investors by issuing $250 million of senior unsecured notes,
consisting of $150 million of notes
with a ten-year term, priced at a fixed interest rate of 4.58%, and
$100 million of notes with a
seven-year term, priced at a fixed interest rate of 4.12%,
resulting in a weighted average fixed interest rate of 4.40%;
- In October, received its second investment grade credit rating
of BBB- with a stable outlook from Standard and Poor's Ratings
Services;
- Throughout 2014, repaid and defeased $179.5 million of mortgage loans, excluding
amortization, with a weighted average contractual interest rate of
6.08%, of which $4.8 million was
defeased in the fourth quarter, with a contractual interest rate of
7.50%.
2015 EARNINGS GUIDANCE
The Company expects to generate Operating FFO per share of
$0.97 - $1.01 in 2015, as detailed
below:
- Generate same store NOI growth of 0.0% - 2.0%. The Gateway, an
asset which was impaired below the debt balance in the third
quarter of 2014, and Towson Circle,
a pending redevelopment asset in the Baltimore MSA, have been
removed from the Company's same store portfolio effective
January 1, 2015. The Company expects
2015 same store NOI growth to be negatively impacted by
approximately 150 - 200 basis points due to the downtime associated
with strategic remerchandising activities, which will significantly
reduce the Company's exposure to several watch list tenants;
- Acquire approximately $400 - $450
million of strategic acquisitions in the Company's target
markets;
- Dispose of approximately $500
million of non-core and non-strategic assets;
- Incur approximately $40 - $42
million of general and administrative expenses, primarily as
a result of higher compensation expense; and
- Issue $250 million of unsecured
debt capital during the first half of 2015.
The following table reconciles the Company's reported 2014
Operating FFO to the Company's 2015 Operating FFO guidance
range.
|
Low
|
High
|
2014 Operating FFO
per common share outstanding
|
$1.09
|
$1.09
|
|
|
|
Same store NOI,
excluding the impact of strategic remerchandising
activities
|
0.03
|
0.05
|
Same store NOI
related to strategic remerchandising activities
|
(0.03)
|
(0.02)
|
Total same store
NOI
|
0.00
|
0.03
|
|
|
|
Non-cash
items(1)
|
(0.02)
|
(0.02)
|
General and
administrative expenses
|
(0.03)
|
(0.02)
|
Lease termination fee
income(2)
|
(0.01)
|
(0.01)
|
The Gateway,
redevelopment and development assets(3)
|
(0.02)
|
(0.02)
|
Impact of 2014
investment activity(4)
|
(0.03)
|
(0.03)
|
Impact of 2015
investment activity(4)
|
(0.01)
|
(0.01)
|
2015 estimated
Operating FFO per common share outstanding
|
$0.97
|
$1.01
|
(1)
|
The Company expects
non-cash items, which include straight-line rental income,
amortization of above and below market lease intangibles and
lease inducements, and non-cash ground rent expense to total
approximately $(0.8) - $(1.3) million in 2015
|
|
|
(2)
|
The Company has not
forecasted any lease termination fee income for 2015
|
|
|
(3)
|
NOI from The Gateway,
the two pending redevelopment assets (Boulevard at the Capital
Centre and Towson Circle) and Bellevue, one of the Company's
development assets, is expected to be approximately $4.0 million
lower in 2015 than 2014
|
|
|
(4)
|
Reflects the relative
timing of acquisitions and dispositions during the year
|
DIVIDEND
On February 10, 2015, the Company's
Board of Directors declared the first quarter 2015 Series A
preferred stock distribution of $0.4375 per preferred share, for the period
beginning January 1, 2015, which will
be paid on March 31, 2015, to
preferred shareholders of record on March
20, 2015.
On February 10, 2015, the
Company's Board of Directors also declared the first quarter 2015
quarterly cash dividend of $0.165625
per share on the Company's outstanding Class A common stock, which
will be paid on April 10, 2015, to
Class A common shareholders of record on March 27, 2015.
WEBCAST AND SUPPLEMENTAL INFORMATION
The Company's management team will hold a webcast, on Wednesday, February 18, 2015 at 11:00 AM EST, to discuss its quarterly and full
year 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 Investor Relations 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 Investor Relations section
of the website and follow the instructions. A replay of the call
will be available from 2:00 PM (EST)
on February 18, 2015, until midnight
(EST) on March 1, 2015. The replay
can be accessed by dialing (877) 870-5176 or (858) 384-5517 for
international callers and entering pin number 13598199.
The Company has also posted supplemental financial and operating
information and other data in the Investor Relations 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 December 31,
2014, the Company owned 208 retail operating properties
representing 30.5 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 "may," "expect," "continue,"
"remains," "intend," "aim," "should," "prospects," "could,"
"future," "potential," "believes," "plans," "likely," "anticipate,"
and "probable," or the negative thereof or other variations thereon
or comparable terminology, 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, market price of the
Company's common stock, general volatility of the capital and
credit markets, competitive and cost factors, the ability of the
Company to enter into new leases or renew leases on favorable
terms, 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, the
effects of declining real estate valuations and impairment charges
on the Company's operating results, interest rates and operating
costs, rental rates and/or vacancy rates, risks generally
associated with real estate acquisitions, dispositions and
redevelopment activity, satisfaction of closing conditions to the
pending transactions described herein, the Company's failure to
successfully execute its non-core disposition program and capital
recycling efforts, the Company's ability to create long-term
shareholder value, the Company's ability to effectively manage
growth, the availability, terms and deployment of capital,
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,
including amounts from continuing and discontinued operations as
well as adjustments for unconsolidated joint ventures in which the
Company holds an interest. The Company has adopted the NAREIT
definition in its computation of FFO. The Company believes that,
subject to the following limitations, FFO provides a basis for
comparing its performance and operations to those of other real
estate investment trusts (REITs). The Company believes that FFO,
which is a non-GAAP performance measure, provides an additional and
useful means to assess the operating performance of REITs.
FFO does not represent an alternative to "Net Income" as an
indicator of the Company's performance or "Cash Flows from
Operating Activities" as determined by GAAP as a measure of the
Company's capacity to fund cash needs, including the payment of
dividends.
The Company also reports Operating FFO, which is defined as FFO
excluding the impact of discrete non-operating transactions and
other events which the Company does not consider representative of
the comparable operating results of the Company's core business
platform, its real estate operating portfolio. 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, actual or anticipated settlement of litigation
involving the Company, and impairment charges to write down the
carrying value of assets other than depreciable real estate, which
are otherwise excluded from the Company's calculation of FFO. The
Company believes that Operating FFO, which is a non-GAAP
performance measure, provides an additional and useful means to
assess the operating performance of REITs. Operating FFO does not
represent an alternative to "Net Income" as an indicator of the
Company's performance or "Cash Flows from Operating Activities" as
determined by GAAP as a measure of the Company's capacity to fund
cash needs, including the payment of dividends. Further, comparison
of the Company's presentation of Operating FFO 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 same store NOI. The Company
defines NOI as operating revenues (rental income, tenant recovery
income and other property income, excluding straight-line rental
income, amortization of lease inducements, amortization of acquired
above and below market lease intangibles and lease termination fee
income) less property operating expenses (real estate tax expense
and property operating expense, excluding straight-line ground rent
expense, amortization of acquired ground lease intangibles and
straight-line bad debt expense). Same Store NOI represents NOI from
the Company's same store portfolio consisting of 197 operating
properties acquired or placed in service and stabilized prior to
January 1, 2013. NOI from Other Investment Properties
represents NOI primarily from properties acquired during 2013 and
2014, the Company's development properties, a property where the
Company began activities during 2014 in anticipation of a future
redevelopment, the investment properties that were sold or held for
sale in 2014 that did not qualify for discontinued operations
treatment, 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 during 2014. NOI consists of the sum of Same
Store NOI and NOI from Other Investment Properties. The Company
believes that Same Store NOI and NOI from Other Investment
Properties are useful measures of the Company's operating
performance. Other REITs may use different methodologies for
calculating these metrics, and accordingly, the Company's NOI
metrics may not be comparable to other REITs. The Company believes
that these metrics provide an operating perspective not immediately
apparent from operating income or net income attributable to common
shareholders as defined within GAAP. The Company uses these metrics
to evaluate its performance on a property-by-property basis because
these measures allow management to evaluate the impact that factors
such as lease structure, lease rates and tenant base, which vary by
property, have on the Company's operating results. However, these
measures should only be used as an alternative measure of our
financial performance.
Adjusted EBITDA 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 its performance from period to period in a meaningful and
consistent manner in addition to standard financial measurements
under GAAP. Adjusted EBITDA is not a measurement of financial
performance under GAAP and should not be considered as an
alternative to net income attributable to common shareholders, as
an indicator of operating performance or any measure of performance
derived in accordance with GAAP. The Company's calculation of
Adjusted EBITDA may be different from the calculation used by other
companies and, accordingly, comparability may be limited.
Net Debt to Adjusted EBITDA represents (i) the Company's total
debt 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 total debt net of cash and cash equivalents, which could
be used to repay debt, compared to the Company's performance as
measured using Adjusted EBITDA.
Net Debt and Preferred Stock to Adjusted EBITDA represents (i)
the Company's total debt, 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 total debt
and preferred stock, net of cash and cash equivalents, which could
be used to repay debt, compared to the Company's performance as
measured using Adjusted EBITDA.
CONTACT INFORMATION
Michael Fitzmaurice, VP -
Finance
Retail Properties of America,
Inc.
(630) 634-4233
Retail Properties
of America, Inc.
Consolidated
Balance Sheets
(amounts in
thousands, except par value amounts)
(unaudited)
|
|
|
|
|
|
|
|
December 31,
2014
|
|
December 31,
2013
|
Assets
|
|
|
|
|
|
|
Investment
properties:
|
|
|
|
|
|
|
Land
|
|
$
|
1,195,369
|
|
|
$
|
1,174,065
|
|
Building and other
improvements
|
|
4,442,446
|
|
|
4,586,657
|
|
Developments in
progress
|
|
42,561
|
|
|
43,796
|
|
|
|
5,680,376
|
|
|
5,804,518
|
|
Less accumulated
depreciation
|
|
(1,365,471)
|
|
|
(1,330,474)
|
|
Net investment
properties
|
|
4,314,905
|
|
|
4,474,044
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
112,292
|
|
|
58,190
|
|
Investment in
unconsolidated joint ventures
|
|
—
|
|
|
15,776
|
|
Accounts and notes
receivable (net of allowances of $7,497 and $8,197,
respectively)
|
|
86,013
|
|
|
80,818
|
|
Acquired lease
intangible assets, net
|
|
125,490
|
|
|
129,561
|
|
Assets associated
with investment properties held for sale
|
|
33,640
|
|
|
8,616
|
|
Other assets,
net
|
|
131,520
|
|
|
110,571
|
|
Total
assets
|
|
$
|
4,803,860
|
|
|
$
|
4,877,576
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Mortgages payable,
net (includes unamortized premium of $3,972 and $1,175,
respectively, and unamortized discount of $(470)
and $(981), respectively)
|
|
$
|
1,634,465
|
|
|
$
|
1,684,633
|
|
Unsecured notes
payable
|
|
250,000
|
|
|
—
|
|
Unsecured term
loan
|
|
450,000
|
|
|
450,000
|
|
Unsecured revolving
line of credit
|
|
—
|
|
|
165,000
|
|
Accounts payable and
accrued expenses
|
|
61,129
|
|
|
54,457
|
|
Distributions
payable
|
|
39,187
|
|
|
39,138
|
|
Acquired lease
intangible liabilities, net
|
|
100,641
|
|
|
91,881
|
|
Liabilities
associated with investment properties held for sale
|
|
8,203
|
|
|
6,603
|
|
Other
liabilities
|
|
70,860
|
|
|
77,030
|
|
Total
liabilities
|
|
2,614,485
|
|
|
2,568,742
|
|
|
|
|
|
|
|
|
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 December
31,
2014 and 2013;
liquidation preference $135,000
|
|
5
|
|
|
5
|
|
Class A common
stock, $0.001 par value, 475,000 shares authorized,
236,602 and 236,302 shares
issued and outstanding as of December 31, 2014 and 2013,
respectively
|
|
237
|
|
|
236
|
|
Additional paid-in
capital
|
|
4,922,864
|
|
|
4,919,633
|
|
Accumulated
distributions in excess of earnings
|
|
(2,734,688)
|
|
|
(2,611,796)
|
|
Accumulated other
comprehensive loss
|
|
(537)
|
|
|
(738)
|
|
Total shareholders'
equity
|
|
2,187,881
|
|
|
2,307,340
|
|
Noncontrolling
interests
|
|
1,494
|
|
|
1,494
|
|
Total
equity
|
|
2,189,375
|
|
|
2,308,834
|
|
Total liabilities
and equity
|
|
$
|
4,803,860
|
|
|
$
|
4,877,576
|
|
Retail Properties
of America, Inc.
Consolidated
Statements of Operations
(amounts in
thousands, except per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
119,592
|
|
|
$
|
113,400
|
|
|
$
|
474,684
|
|
|
$
|
433,591
|
|
Tenant recovery
income
|
|
29,633
|
|
|
28,148
|
|
|
115,719
|
|
|
101,962
|
|
Other property
income
|
|
4,306
|
|
|
9,141
|
|
|
10,211
|
|
|
15,955
|
|
Total
revenues
|
|
153,531
|
|
|
150,689
|
|
|
600,614
|
|
|
551,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
24,492
|
|
|
23,613
|
|
|
96,798
|
|
|
89,067
|
|
Real estate
taxes
|
|
20,718
|
|
|
18,574
|
|
|
78,773
|
|
|
71,191
|
|
Depreciation and
amortization
|
|
52,385
|
|
|
60,134
|
|
|
215,966
|
|
|
222,710
|
|
Provision for
impairment of investment properties
|
|
11,825
|
|
|
32,303
|
|
|
72,203
|
|
|
59,486
|
|
General and
administrative expenses
|
|
11,435
|
|
|
8,370
|
|
|
34,229
|
|
|
31,533
|
|
Total
expenses
|
|
120,855
|
|
|
142,994
|
|
|
497,969
|
|
|
473,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
32,676
|
|
|
7,695
|
|
|
102,645
|
|
|
77,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
extinguishment of other liabilities
|
|
—
|
|
|
—
|
|
|
4,258
|
|
|
—
|
|
Equity in loss of
unconsolidated joint ventures, net (a)
|
|
(645)
|
|
|
(510)
|
|
|
(2,088)
|
|
|
(1,246)
|
|
Gain on sale of joint
venture interest
|
|
—
|
|
|
17,499
|
|
|
—
|
|
|
17,499
|
|
Gain on change in
control of investment properties
|
|
—
|
|
|
5,435
|
|
|
24,158
|
|
|
5,435
|
|
Interest
expense
|
|
(32,743)
|
|
|
(34,440)
|
|
|
(133,835)
|
|
|
(146,805)
|
|
Other income,
net
|
|
76
|
|
|
595
|
|
|
5,459
|
|
|
4,741
|
|
(Loss) income from
continuing operations
|
|
(636)
|
|
|
(3,726)
|
|
|
597
|
|
|
(42,855)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss),
net
|
|
—
|
|
|
6,169
|
|
|
(148)
|
|
|
9,396
|
|
Gain on sales of
investment properties
|
|
—
|
|
|
34,644
|
|
|
655
|
|
|
41,279
|
|
Income from
discontinued operations
|
|
—
|
|
|
40,813
|
|
|
507
|
|
|
50,675
|
|
Gain on sales of
investment properties
|
|
26,501
|
|
|
—
|
|
|
42,196
|
|
|
5,806
|
|
Net income
|
|
25,865
|
|
|
37,087
|
|
|
43,300
|
|
|
13,626
|
|
Net income
attributable to the Company
|
|
25,865
|
|
|
37,087
|
|
|
43,300
|
|
|
13,626
|
|
Preferred stock
dividends
|
|
(2,363)
|
|
|
(2,363)
|
|
|
(9,450)
|
|
|
(9,450)
|
|
Net income
attributable to common shareholders
|
|
$
|
23,502
|
|
|
$
|
34,724
|
|
|
$
|
33,850
|
|
|
$
|
4,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per common share - basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.10
|
|
|
$
|
(0.03)
|
|
|
$
|
0.14
|
|
|
$
|
(0.20)
|
|
Discontinued
operations
|
|
—
|
|
|
0.18
|
|
|
—
|
|
|
0.22
|
|
Net income per common
share attributable to common shareholders
|
|
$
|
0.10
|
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding - basic
|
|
236,204
|
|
|
236,151
|
|
|
236,184
|
|
|
234,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding - diluted
|
|
236,207
|
|
|
236,151
|
|
|
236,187
|
|
|
234,134
|
|
|
|
|
|
(a)
|
Reported amounts
include our loss attributable to our ownership interests in our Oak
Property and Casualty, MS Inland, RioCan and Hampton unconsolidated
joint ventures. All of our unconsolidated joint venture
arrangements were dissolved prior to December 31, 2014.
|
Retail Properties
of America, Inc.
Funds From
Operations (FFO) and Operating FFO (a)
(amounts in
thousands, except per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common shareholders
|
|
$
|
23,502
|
|
|
$
|
34,724
|
|
|
$
|
33,850
|
|
|
$
|
4,176
|
|
Depreciation and
amortization
|
|
52,385
|
|
|
61,791
|
|
|
216,676
|
|
|
241,152
|
|
Provision for
impairment of investment properties
|
|
11,825
|
|
|
32,893
|
|
|
72,203
|
|
|
92,319
|
|
Gain on sales of
investment properties (b)
|
|
(26,501)
|
|
|
(57,578)
|
|
|
(67,009)
|
|
|
(70,996)
|
|
FFO
|
|
$
|
61,211
|
|
|
$
|
71,830
|
|
|
$
|
255,720
|
|
|
$
|
266,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per common share
outstanding
|
|
$
|
0.26
|
|
|
$
|
0.30
|
|
|
$
|
1.08
|
|
|
$
|
1.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
|
$
|
61,211
|
|
|
$
|
71,830
|
|
|
$
|
255,720
|
|
|
$
|
266,651
|
|
Impact on earnings
from the early extinguishment of debt, net
|
|
1,494
|
|
|
2,869
|
|
|
10,479
|
|
|
(15,914)
|
|
Joint venture
investment impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,834
|
|
Reversal of excise
tax accrual (c)
|
|
—
|
|
|
—
|
|
|
(4,594)
|
|
|
—
|
|
Provision for hedge
ineffectiveness
|
|
25
|
|
|
(21)
|
|
|
12
|
|
|
(912)
|
|
Gain on
extinguishment of other liabilities
|
|
—
|
|
|
(3,511)
|
|
|
(4,258)
|
|
|
(3,511)
|
|
Other
|
|
—
|
|
|
(432)
|
|
|
(199)
|
|
|
(1,349)
|
|
Operating
FFO
|
|
$
|
62,730
|
|
|
$
|
70,735
|
|
|
$
|
257,160
|
|
|
$
|
246,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating FFO per
common share outstanding
|
|
$
|
0.27
|
|
|
$
|
0.30
|
|
|
$
|
1.09
|
|
|
$
|
1.05
|
|
|
|
|
|
(a)
|
Includes amounts from
discontinued operations and our pro rata share from our
unconsolidated joint ventures.
|
(b)
|
Gain on sales of
investment properties for the year ended December 31, 2014 includes
the gain on change in control of investment properties of $24,158
recognized pursuant to the dissolution of our joint venture
arrangement with our partner in our MS Inland unconsolidated joint
venture on June 5, 2014. Gain on sales of investment properties for
the year ended December 31, 2013 includes the gain on sale of joint
venture interest of $17,499 and the gain on change in control of
investment properties of $5,435 recognized pursuant to the
dissolution of our RioCan unconsolidated joint venture on October
1, 2013.
|
(c)
|
Included in "Other
income, net" in the consolidated statements of
operations.
|
Retail Properties
of America, Inc.
Reconciliation of
Non-GAAP Financial Measures
(amounts in
thousands)
|
|
|
|
|
|
Reconciliation of
Net Income Attributable to Common Shareholders to
NOI
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store investment
properties (197 properties):
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
100,280
|
|
|
$
|
97,952
|
|
|
$
|
395,800
|
|
|
$
|
386,962
|
|
Tenant recovery
income
|
|
24,997
|
|
|
24,356
|
|
|
96,130
|
|
|
91,295
|
|
Other property
income
|
|
1,724
|
|
|
1,630
|
|
|
6,749
|
|
|
6,759
|
|
Other investment
properties:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
17,823
|
|
|
15,023
|
|
|
72,734
|
|
|
46,287
|
|
Tenant recovery
income
|
|
4,636
|
|
|
3,792
|
|
|
19,589
|
|
|
10,667
|
|
Other property
income
|
|
194
|
|
|
113
|
|
|
795
|
|
|
286
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store investment
properties (197 properties):
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
(20,017)
|
|
|
(19,220)
|
|
|
(77,114)
|
|
|
(76,287)
|
|
Real estate
taxes
|
|
(16,970)
|
|
|
(15,889)
|
|
|
(65,339)
|
|
|
(63,758)
|
|
Other investment
properties:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
(3,660)
|
|
|
(3,155)
|
|
|
(16,355)
|
|
|
(9,082)
|
|
Real estate
taxes
|
|
(3,748)
|
|
|
(2,685)
|
|
|
(13,434)
|
|
|
(7,433)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI from
continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store investment
properties
|
|
90,014
|
|
|
88,829
|
|
|
356,226
|
|
|
344,971
|
|
Other investment
properties
|
|
15,245
|
|
|
13,088
|
|
|
63,329
|
|
|
40,725
|
|
Total NOI from
continuing operations
|
|
105,259
|
|
|
101,917
|
|
|
419,555
|
|
|
385,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line rental
income, net
|
|
802
|
|
|
454
|
|
|
4,781
|
|
|
(381)
|
|
Amortization of
acquired above and below market lease intangibles, net
|
|
861
|
|
|
93
|
|
|
2,076
|
|
|
976
|
|
Amortization of lease
inducements
|
|
(174)
|
|
|
(122)
|
|
|
(707)
|
|
|
(253)
|
|
Lease termination
fees
|
|
2,388
|
|
|
7,278
|
|
|
2,667
|
|
|
8,605
|
|
Straight-line ground
rent expense
|
|
(955)
|
|
|
(1,211)
|
|
|
(3,889)
|
|
|
(3,486)
|
|
Amortization of
acquired ground lease intangibles
|
|
140
|
|
|
93
|
|
|
560
|
|
|
93
|
|
Depreciation and
amortization
|
|
(52,385)
|
|
|
(60,134)
|
|
|
(215,966)
|
|
|
(222,710)
|
|
Provision for
impairment of investment properties
|
|
(11,825)
|
|
|
(32,303)
|
|
|
(72,203)
|
|
|
(59,486)
|
|
General and
administrative expenses
|
|
(11,435)
|
|
|
(8,370)
|
|
|
(34,229)
|
|
|
(31,533)
|
|
Gain on
extinguishment of other liabilities
|
|
—
|
|
|
—
|
|
|
4,258
|
|
|
—
|
|
Equity in loss of
unconsolidated joint ventures, net
|
|
(645)
|
|
|
(510)
|
|
|
(2,088)
|
|
|
(1,246)
|
|
Gain on sale of joint
venture interest
|
|
—
|
|
|
17,499
|
|
|
—
|
|
|
17,499
|
|
Gain on change in
control of investment properties
|
|
—
|
|
|
5,435
|
|
|
24,158
|
|
|
5,435
|
|
Interest
expense
|
|
(32,743)
|
|
|
(34,440)
|
|
|
(133,835)
|
|
|
(146,805)
|
|
Other income,
net
|
|
76
|
|
|
595
|
|
|
5,459
|
|
|
4,741
|
|
Total other
expense
|
|
(105,895)
|
|
|
(105,643)
|
|
|
(418,958)
|
|
|
(428,551)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from
continuing operations
|
|
(636)
|
|
|
(3,726)
|
|
|
597
|
|
|
(42,855)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss),
net
|
|
—
|
|
|
6,169
|
|
|
(148)
|
|
|
9,396
|
|
Gain on sales of
investment properties
|
|
—
|
|
|
34,644
|
|
|
655
|
|
|
41,279
|
|
Income from
discontinued operations
|
|
—
|
|
|
40,813
|
|
|
507
|
|
|
50,675
|
|
Gain on sales of
investment properties
|
|
26,501
|
|
|
—
|
|
|
42,196
|
|
|
5,806
|
|
Net income
|
|
25,865
|
|
|
37,087
|
|
|
43,300
|
|
|
13,626
|
|
Net income
attributable to the Company
|
|
25,865
|
|
|
37,087
|
|
|
43,300
|
|
|
13,626
|
|
Preferred stock
dividends
|
|
(2,363)
|
|
|
(2,363)
|
|
|
(9,450)
|
|
|
(9,450)
|
|
Net income
attributable to common shareholders
|
|
$
|
23,502
|
|
|
$
|
34,724
|
|
|
$
|
33,850
|
|
|
$
|
4,176
|
|
Retail Properties
of America, Inc.
Reconciliation of
Non-GAAP Financial Measures
(amounts in
thousands, except ratios and per share amounts)
|
|
|
|
Reconciliation of
Net Income Attributable to Common Shareholders to Adjusted
EBITDA
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
Net income
attributable to common shareholders
|
|
$
|
23,502
|
|
|
$
|
34,724
|
|
Preferred stock
dividends
|
|
2,363
|
|
|
2,363
|
|
Interest
expense
|
|
32,743
|
|
|
34,440
|
|
Interest expense
(discontinued operations)
|
|
—
|
|
|
364
|
|
Depreciation and
amortization
|
|
52,385
|
|
|
60,134
|
|
Depreciation and
amortization (discontinued operations)
|
|
—
|
|
|
1,244
|
|
Gain on sales of
investment properties
|
|
(26,501)
|
|
|
—
|
|
Gain on sales of
investment properties (discontinued operations)
|
|
—
|
|
|
(34,644)
|
|
Gain on sale of joint
venture interest
|
|
—
|
|
|
(17,499)
|
|
Gain on change in
control of investment properties
|
|
—
|
|
|
(5,435)
|
|
Gain on
extinguishment of other liabilities (discontinued
operations)
|
|
—
|
|
|
(3,511)
|
|
Provision for
impairment of investment properties
|
|
11,825
|
|
|
32,303
|
|
Provision for
impairment of investment properties (discontinued
operations)
|
|
—
|
|
|
590
|
|
Adjusted
EBITDA
|
|
$
|
96,317
|
|
|
$
|
105,073
|
|
Annualized
|
|
$
|
385,268
|
|
|
$
|
420,292
|
|
Reconciliation of
Debt to Total Net Debt and Net Debt and Preferred
Stock
|
|
|
|
|
|
|
|
December 31,
2014
|
|
December 31,
2013
|
|
|
|
|
|
|
|
Total consolidated
debt
|
|
$
|
2,342,540
|
|
|
$
|
2,306,068
|
|
Less: consolidated
cash and cash equivalents
|
|
(112,292)
|
|
|
(58,190)
|
|
Net debt
|
|
$
|
2,230,248
|
|
|
$
|
2,247,878
|
|
Preferred
stock
|
|
135,000
|
|
|
135,000
|
|
Net debt and
preferred stock
|
|
$
|
2,365,248
|
|
|
$
|
2,382,878
|
|
Net Debt to
Adjusted EBITDA (a)
|
|
5.8x
|
|
5.3x
|
Net Debt and
Preferred Stock to Adjusted EBITDA (a)
|
|
6.1x
|
|
5.7x
|
FFO and Operating
FFO Guidance
|
|
|
|
|
|
Per Share Guidance
Range
Full Year
2015
|
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
Net income
attributable to common shareholders
|
|
$
|
0.53
|
|
|
$
|
0.57
|
|
Depreciation and
amortization
|
|
0.89
|
|
|
0.89
|
|
Provision for
impairment of investment properties
|
|
—
|
|
|
—
|
|
Gain on sales of
investment properties
|
|
(0.53)
|
|
|
(0.53)
|
|
FFO
|
|
$
|
0.89
|
|
|
$
|
0.93
|
|
|
|
|
|
|
|
|
Impact on earnings
from the early extinguishment of debt, net
|
|
0.08
|
|
|
0.08
|
|
Provision for hedge
ineffectiveness
|
|
—
|
|
|
—
|
|
Other
|
|
—
|
|
|
—
|
|
Operating
FFO
|
|
$
|
0.97
|
|
|
$
|
1.01
|
|
|
|
|
|
(a)
|
For purposes of these
ratio calculations, annualized three months ended figures were
used.
|
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SOURCE Retail Properties of America, Inc.