OAK BROOK, Ill., May 2, 2016 /PRNewswire/ -- Retail
Properties of America, Inc. (NYSE: RPAI) (the "Company") today
reported financial and operating results for the quarter ended
March 31, 2016.
FINANCIAL RESULTS
For the quarter ended March 31, 2016, the Company reported:
- Operating funds from operations (Operating FFO) attributable to
common shareholders of $65.7 million,
or $0.28 per share, compared to
$62.3 million, or $0.26 per share, for the same period in
2015;
- Funds from operations (FFO) attributable to common shareholders
of $76.4 million, or $0.32 per share, compared to $60.5 million, or $0.26 per share, for the same period in
2015;
- Net income attributable to common shareholders of $45.1 million, or $0.19 per share, compared to $10.7 million, or $0.05 per share, for the same period in 2015;
and
- Results for the quarter ended March 31,
2016 included the following:
- $1.8 million of Circuit City
Stores, Inc. (Circuit City) bankruptcy proceeds, consisting of
$1.1 million of termination fee
income and $0.7 million of bad debt
recovery; and
- $0.8 million of bad debt expense
related to The Sports Authority, Inc. (Sports Authority)
bankruptcy.
OPERATING RESULTS
For the quarter ended March 31, 2016, the Company's portfolio results
were as follows:
- 3.1% increase in same store net operating income (NOI) over the
comparable period in 2015, which included the following:
- a contribution of 75 basis points from bad debt recovery
attributable to Circuit City bankruptcy proceeds; and
- a reduction of 80 basis points from bad debt expense related to
the Sports Authority bankruptcy.
- Total same store portfolio percent leased, including leases
signed but not commenced: 95.2% at March 31,
2016, down 50 basis points from 95.7% at December 31, 2015 and down 40 basis points from
95.6% at March 31, 2015;
- Total portfolio percent leased, including leases signed but not
commenced: 94.7% at both March 31,
2016 and March 31, 2015, down
40 basis points from 95.1% at December 31,
2015;
- Retail portfolio percent leased, including leases signed but
not commenced: 94.6% at March 31,
2016, up 10 basis points from 94.5% at March 31, 2015 and down 30 basis points from
94.9% at December 31, 2015;
- Retail portfolio annualized base rent (ABR) per occupied square
foot of $16.64 at March 31, 2016, up 6.0% from $15.70 ABR per occupied square foot at
March 31, 2015;
- 789,000 square feet of retail leasing transactions comprised of
140 new and renewal leases; and
- Positive comparable cash blended leasing spreads of 6.7%,
consisting of 7.3% on renewal leases and 1.8% 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, comparable
cash blended leasing spreads were 8.0%, including 8.9% on renewal
leases.
"We are pleased to report another solid quarter of financial and
operational results, with same store NOI growth of 3.1% and strong
leasing spreads," stated Steve
Grimes, president and chief executive officer. "In addition,
we continue to execute on our strategic plan, with notable
additional progress on our 2016 disposition goals with 40% of our
targeted amount closed or under contract."
INVESTMENT
ACTIVITY
Dispositions
During the quarter,
the Company completed $127.9 million
of dispositions, including the sales of two non-target multi-tenant
retail assets for $92.5 million and
six single-user retail assets for $35.4
million. Subsequent to quarter end, the Company completed
the sale of a single-user retail asset for $4.7 million.
Additionally, the Company is under contract to sell two
non-target multi-tenant retail assets for $97.8 million and nine single-user retail assets
for $31.5 million. These transactions
are expected to close during the second or third quarter of 2016,
subject to satisfaction of customary closing conditions. Year to
date, the Company has completed or is under contract for
$261.9 million of dispositions.
Acquisitions
During the quarter, the Company
completed $138.7 million of
previously announced acquisitions, including Merrifield Town Center
II and Shoppes at Hagerstown, both
located in the greater Washington,
D.C./Baltimore area, and
Oak Brook Promenade located in the Chicago Metropolitan Statistical
Area (MSA). Subsequent to quarter end, the Company closed on the
previously announced acquisition of The Shoppes at Union Hill located in the New York MSA for
$63.1 million, which includes the
assumption of mortgage debt with a principal balance of
$16.0 million and an interest rate of
3.75% that matures in 2031. In addition, the Company acquired the
fee interest in one of its multi-tenant retail properties for a
gross purchase price of $13.9
million.
Year to date, the Company has completed $215.7 million of acquisitions, primarily on an
unencumbered basis, with a weighted average ABR per occupied square
foot of $24.90.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of
March 31, 2016, the Company had
approximately $2.3 billion of
consolidated indebtedness, which resulted in a net debt to adjusted
EBITDA ratio of 5.7x, or a net debt and preferred stock to adjusted
EBITDA ratio of 6.1x. Consolidated indebtedness had a weighted
average contractual interest rate of 4.27% and a weighted average
maturity of 4.7 years.
During the quarter, the Company completed the previously
announced disposition of The Gateway for $75.0 million through a lender-directed sale in
full satisfaction of its mortgage obligation of approximately
$94.4 million. The mortgage had an
interest rate of 6.57%. Immediately prior to the disposition, the
lender reduced the Company's loan obligation to $75.0 million which was assumed by the buyer in
connection with the disposition, resulting in a gain on
extinguishment of debt of $13.7
million and a gain on sale of $3.9
million. Subsequent to quarter end, the Company repaid
$6.6 million of mortgage debt,
excluding amortization, with an interest rate of 7.30% and assumed
a $16.0 million mortgage with an
interest rate of 3.75% that matures in 2031 in connection with the
acquisition of The Shoppes at Union
Hill.
During the quarter, the Company closed on the previously
announced $1.2 billion amended and
restated unsecured credit facility, which increased total capacity
by $200.0 million, extended the term
by a weighted average of 2.2 years and lowered the interest rate by
a weighted average of 13 basis points.
In addition, during the quarter, the Company entered into an
interest rate swap agreement to effectively fix the interest rate
on $100.0 million of borrowings under
its $250.0 million unsecured term
loan at 0.6591% plus a credit spread through December 31, 2017. As of March 31, 2016, the all-in rate was
1.9591%.
GUIDANCE
The Company is increasing its 2016 Operating
FFO guidance to a range of $1.03 to
$1.07 per share from $1.01 to
$1.05 per share, as detailed below:
- Maintaining its 2016 same store NOI growth guidance range of
2.5% to 3.5%;
- Maintaining its 2016 general and administrative expenses
guidance range of $45 to $47
million;
- Increasing its 2016 disposition guidance to a range of
$600 to $700 million from
$525 to $625 million;
- Maintaining its 2016 acquisition guidance range of $375 to $475 million; and
- Issuing $250 million of unsecured
debt capital during the fourth quarter of 2016 rather than the
first half of 2016, depending on market conditions.
The following table reconciles the Company's previous 2016
Operating FFO guidance range to the Company's updated 2016
Operating FFO guidance range:
|
Low
|
High
|
Previous 2016
Operating FFO attributable to common shareholders per common
share outstanding
|
$1.01
|
$1.05
|
|
|
|
Impact of 2016 net
investment activity
|
0.01
|
0.01
|
Interest
expense
|
0.01
|
0.01
|
Updated 2016
Operating FFO attributable to common shareholders per common share
outstanding
|
$1.03
|
$1.07
|
DIVIDEND
On April 26,
2016, the Company's Board of Directors declared the second
quarter 2016 Series A preferred stock distribution of $0.4375 per preferred share, for the period
beginning April 1, 2016, which will
be paid on June 30, 2016 to preferred
shareholders of record on June 20,
2016.
On April 26, 2016, the Company's
Board of Directors also declared the second quarter 2016 quarterly
cash dividend of $0.165625 per share
on the Company's outstanding Class A common stock, which will be
paid on July 8, 2016 to Class A
common shareholders of record on June 27,
2016.
WEBCAST AND SUPPLEMENTAL INFORMATION
The Company's
management team will hold a webcast on Tuesday, May 3, 2016 at 11:00 AM (EDT), 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 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 (EDT)
on May 3, 2016 until midnight (EDT)
on May 17, 2016. The replay can be
accessed by dialing (877) 870-5176 or (858) 384-5517 for
international callers and entering pin number 13632428.
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 March 31, 2016, the Company owned 192 retail
operating properties representing 28.3 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," "continues" 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, including The Sports
Authority, Inc., which filed for bankruptcy during the three months
ended March 31, 2016, interest rates
or operating costs, real estate valuations, potentially resulting
in impairment charges, 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, dispositions
and redevelopment, including the impact of construction delays and
cost overruns, the Company's ability to effectively manage growth,
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 non-GAAP performance 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 "Net Income" or "Net Income Attributable to Common
Shareholders" 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 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 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, 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 non-GAAP
performance 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 "Net Income" or "Net Income Attributable to Common
Shareholders" 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 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 NOI and 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 178 retail
operating properties acquired or placed in service and stabilized
prior to January 1, 2015. NOI from Other Investment Properties
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 activities in anticipation of future redevelopment, the
properties that were sold or held for sale in 2015 and 2016 and the
net income from the Company's wholly-owned captive insurance
company, which was formed on December 1,
2014. NOI consists of the sum of Same Store NOI and NOI from
Other Investment Properties. The Company believes that NOI, 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 alternative measures of the Company's
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 borrowed 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 total borrowed debt net of
cash and cash equivalents, which could be used to repay borrowed
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 borrowed 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 total borrowed debt and preferred stock, net of cash and
cash equivalents, which could be used to repay borrowed 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.
|
Condensed
Consolidated Balance Sheets
|
(amounts in
thousands, except par value amounts)
|
(unaudited)
|
|
|
|
March 31,
2016
|
|
December 31,
2015
|
Assets
|
|
|
|
|
Investment
properties:
|
|
|
|
|
Land
|
|
$
|
1,266,307
|
|
|
$
|
1,254,131
|
|
Building and other
improvements
|
|
4,428,741
|
|
|
4,428,554
|
|
Developments in
progress
|
|
3,000
|
|
|
5,157
|
|
|
|
5,698,048
|
|
|
5,687,842
|
|
Less accumulated
depreciation
|
|
(1,458,841)
|
|
|
(1,433,195)
|
|
Net investment
properties (includes $60,400 and $0 from consolidated
variable interest entities,
respectively)
|
|
4,239,207
|
|
|
4,254,647
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
100,588
|
|
|
51,424
|
|
Accounts and notes
receivable (net of allowances of $7,085 and $7,910,
respectively)
|
|
73,774
|
|
|
82,804
|
|
Acquired lease
intangible assets, net
|
|
142,788
|
|
|
138,766
|
|
Assets associated
with investment properties held for sale
|
|
2,843
|
|
|
—
|
|
Other assets,
net
|
|
128,610
|
|
|
93,610
|
|
Total
assets
|
|
$
|
4,687,810
|
|
|
$
|
4,621,251
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Liabilities:
|
|
|
|
|
Mortgages payable,
net (includes unamortized premium of $1,758 and $1,865,
respectively, unamortized discount of
$(1) and $(1), respectively, and unamortized capitalized loan fees of $(6,630) and
$(7,233), respectively)
|
|
$
|
1,026,443
|
|
|
$
|
1,123,136
|
|
Unsecured notes
payable, net (includes unamortized discount of $(1,060) and
$(1,090), respectively, and
unamortized capitalized loan fees of $(3,233) and $(3,334),
respectively)
|
|
495,707
|
|
|
495,576
|
|
Unsecured term loans,
net (includes unamortized capitalized loan fees of $(3,290)
and $(2,474), respectively)
|
|
446,710
|
|
|
447,526
|
|
Unsecured revolving
line of credit
|
|
280,000
|
|
|
100,000
|
|
Accounts payable and
accrued expenses
|
|
51,370
|
|
|
69,800
|
|
Distributions
payable
|
|
39,311
|
|
|
39,297
|
|
Acquired lease
intangible liabilities, net
|
|
113,900
|
|
|
114,834
|
|
Other
liabilities
|
|
72,951
|
|
|
75,745
|
|
Total
liabilities
|
|
2,526,392
|
|
|
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 March 31,
2016 and December 31, 2015;
liquidation preference $135,000
|
|
5
|
|
|
5
|
|
Class A common
stock, $0.001 par value, 475,000 shares authorized,
237,347 and 237,267 shares issued and
outstanding as of March 31, 2016 and December 31, 2015, respectively
|
|
237
|
|
|
237
|
|
Additional paid-in
capital
|
|
4,931,707
|
|
|
4,931,395
|
|
Accumulated
distributions in excess of earnings
|
|
(2,770,479)
|
|
|
(2,776,215)
|
|
Accumulated other
comprehensive loss
|
|
(52)
|
|
|
(85)
|
|
Total
equity
|
|
2,161,418
|
|
|
2,155,337
|
|
Total liabilities
and equity
|
|
$
|
4,687,810
|
|
|
$
|
4,621,251
|
|
Retail Properties
of America, Inc.
|
Condensed
Consolidated Statements of Operations
|
(amounts in
thousands, except per share amounts)
|
(unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
Rental
income
|
|
$
|
115,260
|
|
|
$
|
119,788
|
|
Tenant recovery
income
|
|
30,356
|
|
|
31,300
|
|
Other property
income
|
|
3,023
|
|
|
2,109
|
|
Total
revenues
|
|
148,639
|
|
|
153,197
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Property operating
expenses
|
|
23,061
|
|
|
25,695
|
|
Real estate
taxes
|
|
19,939
|
|
|
20,510
|
|
Depreciation and
amortization
|
|
53,396
|
|
|
54,676
|
|
Provision for
impairment of investment properties
|
|
2,164
|
|
|
—
|
|
General and
administrative expenses
|
|
11,406
|
|
|
10,992
|
|
Total
expenses
|
|
109,966
|
|
|
111,873
|
|
|
|
|
|
|
Operating
income
|
|
38,673
|
|
|
41,324
|
|
|
|
|
|
|
Gain on
extinguishment of debt
|
|
13,653
|
|
|
—
|
|
Interest
expense
|
|
(26,764)
|
|
|
(34,045)
|
|
Other income,
net
|
|
125
|
|
|
1,225
|
|
Income from
continuing operations
|
|
25,687
|
|
|
8,504
|
|
Gain on sales of
investment properties
|
|
21,739
|
|
|
4,572
|
|
Net income
|
|
47,426
|
|
|
13,076
|
|
Preferred stock
dividends
|
|
(2,362)
|
|
|
(2,362)
|
|
Net income
attributable to common shareholders
|
|
$
|
45,064
|
|
|
$
|
10,714
|
|
|
|
|
|
|
Earnings per
common share – basic and diluted
|
|
|
|
|
Net income per common
share attributable to common shareholders
|
|
$
|
0.19
|
|
|
$
|
0.05
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding – basic
|
|
236,578
|
|
|
236,250
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding – diluted
|
|
236,680
|
|
|
236,253
|
|
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
March
31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
Net income
attributable to common shareholders
|
|
$
|
45,064
|
|
|
$
|
10,714
|
|
Depreciation and
amortization
|
|
53,094
|
|
|
54,401
|
|
Gain on sales of
investment properties
|
|
(21,739)
|
|
|
(4,572)
|
|
FFO attributable
to common shareholders
|
|
$
|
76,419
|
|
|
$
|
60,543
|
|
|
|
|
|
|
FFO attributable to
common shareholders per common share outstanding
|
|
$
|
0.32
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to
common shareholders
|
|
$
|
76,419
|
|
|
$
|
60,543
|
|
Impact on earnings
from the early extinguishment of debt, net
|
|
(12,846)
|
|
|
2,786
|
|
Provision for hedge
ineffectiveness
|
|
—
|
|
|
(25)
|
|
Provision for
impairment of non-depreciable investment property
|
|
2,164
|
|
|
—
|
|
Other (a)
|
|
—
|
|
|
(1,000)
|
|
Operating FFO
attributable to common shareholders
|
|
$
|
65,737
|
|
|
$
|
62,304
|
|
|
|
|
|
|
Operating FFO
attributable to common shareholders per common share
outstanding
|
|
$
|
0.28
|
|
|
$
|
0.26
|
|
|
|
(a)
|
Consists of the
impact on earnings from net settlements, which are included in
"Other income, net" in the condensed consolidated statements of
operations.
|
Retail Properties
of America, Inc.
|
Reconciliation of
Non-GAAP Financial Measures
|
(amounts in
thousands)
|
(unaudited)
|
|
Reconciliation of
Net Income Attributable to Common Shareholders to
NOI
|
|
|
|
Three Months
Ended
March
31,
|
|
|
2016
|
|
2015
|
Operating
revenues
|
|
|
|
|
Same store investment
properties (178 retail operating properties):
|
|
|
|
|
Rental
income
|
|
$
|
98,278
|
|
|
$
|
96,384
|
|
Tenant recovery
income
|
|
26,166
|
|
|
26,671
|
|
Other property
income
|
|
898
|
|
|
1,002
|
|
Other investment
properties:
|
|
|
|
|
Rental
income
|
|
15,609
|
|
|
22,130
|
|
Tenant recovery
income
|
|
4,190
|
|
|
4,629
|
|
Other property
income
|
|
467
|
|
|
973
|
|
Operating
expenses
|
|
|
|
|
Same store investment
properties (178 retail operating properties):
|
|
|
|
|
Property operating
expenses
|
|
(17,777)
|
|
|
(19,116)
|
|
Real estate
taxes
|
|
(17,759)
|
|
|
(17,817)
|
|
Other investment
properties:
|
|
|
|
|
Property operating
expenses
|
|
(4,508)
|
|
|
(5,785)
|
|
Real estate
taxes
|
|
(2,180)
|
|
|
(2,693)
|
|
|
|
|
|
|
NOI from
continuing operations
|
|
|
|
|
Same store investment
properties
|
|
89,806
|
|
|
87,124
|
|
Other investment
properties
|
|
13,578
|
|
|
19,254
|
|
Total NOI from
continuing operations
|
|
103,384
|
|
|
106,378
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
Straight-line rental
income, net
|
|
1,028
|
|
|
1,012
|
|
Amortization of
acquired above and below market lease intangibles, net
|
|
576
|
|
|
451
|
|
Amortization of lease
inducements
|
|
(231)
|
|
|
(189)
|
|
Lease termination
fees
|
|
1,658
|
|
|
134
|
|
Straight-line ground
rent expense
|
|
(916)
|
|
|
(934)
|
|
Amortization of
acquired ground lease intangibles
|
|
140
|
|
|
140
|
|
Depreciation and
amortization
|
|
(53,396)
|
|
|
(54,676)
|
|
Provision for
impairment of investment properties
|
|
(2,164)
|
|
|
—
|
|
General and
administrative expenses
|
|
(11,406)
|
|
|
(10,992)
|
|
Gain on extinguishment
of debt
|
|
13,653
|
|
|
—
|
|
Interest
expense
|
|
(26,764)
|
|
|
(34,045)
|
|
Other income,
net
|
|
125
|
|
|
1,225
|
|
Total other
expense
|
|
(77,697)
|
|
|
(97,874)
|
|
|
|
|
|
|
Income from
continuing operations
|
|
25,687
|
|
|
8,504
|
|
Gain on sales of
investment properties
|
|
21,739
|
|
|
4,572
|
|
Net income
|
|
47,426
|
|
|
13,076
|
|
Preferred stock
dividends
|
|
(2,362)
|
|
|
(2,362)
|
|
Net income
attributable to common shareholders
|
|
$
|
45,064
|
|
|
$
|
10,714
|
|
Retail Properties
of America, Inc.
|
Reconciliation of
Non-GAAP Financial Measures
|
(amounts in
thousands, except ratios and per share amounts)
|
(unaudited)
|
|
|
Reconciliation of
Net Income Attributable to Common Shareholders to Adjusted
EBITDA
|
|
|
|
Three Months
Ended
|
|
|
March
31,
2016
|
|
December
31,
2015
|
|
|
|
|
|
Net income
attributable to common shareholders
|
|
$
|
45,064
|
|
|
$
|
644
|
|
Preferred stock
dividends
|
|
2,362
|
|
|
2,363
|
|
Interest
expense
|
|
26,764
|
|
|
28,328
|
|
Depreciation and
amortization
|
|
53,396
|
|
|
51,361
|
|
Gain on sales of
investment properties, net of noncontrolling interest
|
|
(21,739)
|
|
|
(8,050)
|
|
Gain on
extinguishment of debt
|
|
(13,653)
|
|
|
—
|
|
Provision for
impairment of investment properties
|
|
2,164
|
|
|
15,824
|
|
Realignment
separation charges (a)
|
|
—
|
|
|
1,193
|
|
Adjusted
EBITDA
|
|
$
|
94,358
|
|
|
$
|
91,663
|
|
Annualized
|
|
$
|
377,432
|
|
|
$
|
366,652
|
|
Reconciliation of
Borrowed Debt to Total Net Debt and Net Debt and Preferred
Stock
|
|
|
|
March
31,
2016
|
|
December
31,
2015
|
|
|
|
|
|
Total borrowed
debt
|
|
$
|
2,261,316
|
|
|
$
|
2,178,505
|
|
Less: consolidated
cash and cash equivalents
|
|
(100,588)
|
|
|
(51,424)
|
|
Total net
debt
|
|
$
|
2,160,728
|
|
|
$
|
2,127,081
|
|
Preferred
stock
|
|
135,000
|
|
|
135,000
|
|
Net debt and
preferred stock
|
|
$
|
2,295,728
|
|
|
$
|
2,262,081
|
|
Net Debt to
Adjusted EBITDA (b)
|
|
5.7x
|
|
|
5.8x
|
|
Net Debt and
Preferred Stock to Adjusted EBITDA (b)
|
|
6.1x
|
|
|
6.2x
|
|
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
|
|
$
|
0.94
|
|
|
$
|
0.98
|
|
Depreciation and
amortization
|
|
0.90
|
|
|
0.90
|
|
Provision for
impairment of investment properties
|
|
—
|
|
|
—
|
|
Gain on sales of
investment properties
|
|
(0.74)
|
|
|
(0.74)
|
|
FFO attributable
to common shareholders
|
|
$
|
1.10
|
|
|
$
|
1.14
|
|
|
|
|
|
|
Impact on earnings
from the early extinguishment of debt, net
|
|
(0.05)
|
|
|
(0.05)
|
|
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
|
|
$
|
1.03
|
|
|
$
|
1.07
|
|
|
|
(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.