UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
February 29, 2016
Date of Report (Date of earliest event reported)
Rouse Properties, Inc.
(Exact name of registrant as specified in its charter)
|
| | | | |
Delaware | | 1-35278 | | 90-0750824 |
(State or other jurisdiction | | (Commission | | (IRS Employer |
of incorporation) | | File Number) | | Identification No.) |
|
| | |
1114 Avenue of the Americas, Suite 2800, New York, New York | | 10036 |
(Address of principal executive offices) | | (Zip Code) |
(212) 608-5108
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 29, 2016, Rouse Properties, Inc. (the “Company”) issued a press release announcing the financial results of the Company for the quarter ended December 31, 2015. A copy of the press release is being furnished as Exhibit 99.1 to this report. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure.
On February 29, 2016, the Company made available on its website the press release described in Item 2.02 above as well as certain supplemental financial information regarding its operations for the quarter ended December 31, 2015. A copy of such supplemental financial information is being furnished as Exhibit 99.2 to this report. This information shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
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| | | |
Exhibit No. | | Description |
99.1 |
| | Press Release titled “Rouse Properties Reports Fourth Quarter and Full Year 2015 Results,” dated February 29, 2016 (furnished herewith). |
99.2 |
| | Certain Supplemental Information for the Quarter Ended December 31, 2015 (furnished herewith). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | |
| | ROUSE PROPERTIES, INC. |
| | |
| | |
| By: | /s/ John Wain |
| | John Wain |
| | Chief Financial Officer |
| |
Date: February 29, 2016 | |
EXHIBIT INDEX
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| | | |
Exhibit No. | | Description |
99.1 |
| | Press Release titled “Rouse Properties Reports Fourth Quarter and Full Year 2015 Results,” dated February 29, 2016 (furnished herewith). |
99.2 |
| | Certain Supplemental Information for the Quarter Ended December 31, 2015 (furnished herewith). |
Rouse Properties Reports Fourth Quarter and Full Year 2015 Results
New York, NY, February 29, 2016 - Rouse Properties, Inc. (the "Company" or "Rouse") (NYSE: RSE), today announced consolidated results for the three months and twelve months ended December 31, 2015.
The Company previously announced that it has entered into a definitive agreement to be acquired by an affiliate of Brookfield Asset Management Inc. (NYSE: BAM, TSX: BAM.A, Euronext: BAMA) (“Brookfield”) for $18.25 per share in an all-cash transaction, a portion of which may be paid out as a special dividend. Under the terms of the agreement, Brookfield will acquire all of the outstanding shares of Rouse’s common stock, other than those shares currently held by Brookfield Property Partners L.P. (NYSE: BPY, TSX: BPY.UN) and its affiliates, in a transaction valued at approximately $2.8 billion, including Rouse’s indebtedness. The agreement prohibits the payment of any further dividends by Rouse, other than as part of the $18.25 per share consideration payable in the transaction. The purchase price represents a premium of approximately 35% over Rouse’s closing stock price on January 15, 2016, the last trading day prior to Brookfield’s announcement of a proposal to acquire Rouse. The Special Committee of the Board of Directors of Rouse unanimously approved the agreement. Completion of the transaction is expected to occur by the third quarter of 2016, and is contingent upon customary closing conditions, including the approval of the holders of a majority of the outstanding shares of Rouse’s common stock not currently held by Brookfield Property Partners and its affiliates. The transaction is not subject to a financing contingency.
Operational and Financial Highlights for Fourth Quarter and Full Year 2015
| |
• | Total initial rental rates for new and renewal leases on a same suite basis rose 14.9% for the quarter ended December 31, 2015 and 12.3% for the full year. |
| |
• | For the Operating Portfolio(1), tenant sales were $350 per square foot on a trailing twelve month basis. On a comparable basis, trailing twelve month Operating Portfolio tenant sales increased 7.4%. |
| |
• | For the Operating Portfolio, inline leased percentage decreased 30 basis points YoY to 92.0%, and decreased 40 basis points sequentially. |
| |
• | For the Operating Portfolio, inline occupancy decreased 10 basis points YoY to 90.4%, and increased 170 basis points sequentially. |
| |
• | Same Property Core NOI increased by 4.0% in the fourth quarter compared to the same period in the prior year, and grew by 2.6% for the full year. |
| |
• | Same Property average mall in-place rent for tenants less than 10,000 square feet increased 5.5%, year over year, to $41.79 from $39.62 per square foot. |
(1) Operating Portfolio excludes properties undergoing substantial redevelopment and special consideration assets.
Financial Results for the Three Months Ended December 31, 2015
Core FFO for the three months ended December 31, 2015 was $0.58 per diluted share, as compared to $0.46 per diluted share for the three months ended December 31, 2014. Core FFO increased to $33.5 million from $27.0 million for the three months ended December 31, 2015 compared to the prior year period.
Core NOI for the three months ended December 31, 2015 increased to $56.4 million from $53.3 million for the three months ended December 31, 2014. On a Same Property basis, excluding lease termination income of approximately $1.0 million, Same Property Core NOI, increased to $42.4 million for three months ended December 31, 2015, an increase of 4.0% as compared to the Same Property Core NOI of $40.7 million for the prior year period.
Net loss allocable to common shareholders was $(1.7) million or $(0.03) per basic and diluted share for the three months ended December 31, 2015 compared to a net loss of $(12.6) million, or $(0.22) per basic and diluted share for the prior year period .
Financial Results for the Twelve Months Ended December 31, 2015
Core FFO for the year ended December 31, 2015 was $104.0 million, or $1.79 per diluted share, compared to $94.5 million, or $1.64 per diluted share for the year ended December 31, 2014. Core FFO per share increased 9.1% in 2015 due to an increase in Same Property Core NOI, as well as, an increase from the properties that were acquired during the year.
Core NOI was $197.3 million for the year ended December 31, 2015, compared to $189.5 million for the year ended December 31, 2014. On a Same Property basis, excluding lease termination income of approximately $1.8 million, Same Property Core NOI increased by 2.6% to $151.8 million from $148.0 million for the year ended December 31, 2015 compared to December 31, 2014.
Net income allocable to common shareholders for the year ended December 31, 2015 was $40.7 million or $0.70 per basic and diluted share, compared to a net loss allocable to common shareholders of $(51.8) million, or $(0.90) per basic and diluted share in the prior year period. The change in net income (loss) was primarily due to a gain on extinguishment of debt and a gain on dispositions of $61.4 million, as well as an increase in income from the Same Property portfolio. In addition, a reduction in interest expense and provision for impairment during 2015 also contributed to the change in net income (loss) allocable to common shareholders.
Financings
During the three months ended December 31, 2015, the loan associated with Greenville Mall, located in Greenville, North Carolina was refinanced with a new, non-recourse mortgage loan for $45.5 million. The loan bears interest at a fixed rate of 4.46%, matures in November 2025, and amortizes over 30 years. This loan replaced a $40.2 million non-recourse mortgage loan which had a fixed interest rate of 5.29%.
Also, the loan associated with The Shoppes at Bel Air located in Mobile, Alabama, was refinanced with a new, non-recourse mortgage loan for $120.0 million. The initial funding of $110.5 million was used to retire the outstanding mortgage loan of $109.5 million which had a fixed interest rate of 5.30%. The loan provides for a subsequent funding of $9.5 million upon achieving certain conditions. The loan has an initial maturity of November 2018 and has a one year extension option. The loan bears interest at a floating rate of LIBOR (30 day) plus 235 basis points, and is interest only for the first two years and amortizes $137,500 per month, thereafter. The loan has a term of three years, with two one-year extension options subject to achieving certain conditions. The borrower entered into an interest swap beginning January 2016 which fixes the interest rate at 3.34%, through November 2018.
In addition, The Shoppes at Gateway was removed from the 2013 Senior Facility collateral pool and a new $75.0 million non-recourse mortgage loan was placed on the property. The loan bears interest at a floating rate of LIBOR (30 day) plus 220 basis points, has an initial maturity of January 2020 with a one year extension option, is interest only for the first four years and amortizes over 30 years during the extension period. The Company entered into an interest rate swap on the loan which fixes the interest rate at 3.64% through January 2020.
For the year ended December 31, 2015, the Company completed $531.6 million of financings.
Acquisitions
During the three months ended December 31, 2015, the Company acquired The Shoppes at Carlsbad located in Carlsbad, California, for a total purchase price of approximately $170.0 million, net of closing costs and adjustments. In conjunction with the closing Rouse Properties, L.P., the operating partnership of the Company, issued $140.0 million of Series A Preferred Units to the seller. The Shoppes at Carlsbad was added to the 2013 Senior Facility collateral pool with no change to the outstanding 2013 Senior Facility balance.
For the year ended December 31, 2015, the Company acquired interests in three retail properties totaling 1.9 million square feet with a gross value of $325.1 million.
Equity
During the three months ended December 31, 2015, the Company repurchased 238,055 shares of its outstanding Common Stock for approximately $3.5 million, at an average cost of $14.73 per share. As of December 31, 2015, the Company had $46.5 million of remaining capacity to repurchase common stock under the stock repurchase program.
Subsequent Events
Subsequent to December 31, 2015, the Company settled the repurchase of 105,000 shares of its outstanding common stock for $1.6 million, at an average cost of $14.87 per share.
Other
In light of the pending acquisition as described above, the Company will not hold an investor webcast and conference call to discuss its fourth quarter and full year 2015 results or provide financial guidance for 2016.
Supplemental Information
The Company released an informational supplemental packet, available at www.rouseproperties.com under the Investors section, with additional detail, including a description of non-GAAP financial measures and reconciliation to GAAP measures.
Forward Looking Statements
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These forward-looking statements may include statements related to the Company's ability to outperform the ongoing recovery of the Retail and REIT industry and the markets in which the Company's mall properties are located, the Company's ability to generate internal and external growth, the Company's ability to identify and complete the acquisition of properties in new markets, the Company's ability to complete redevelopment projects and the Company's ability to increase margins, including Net Operating Income. For a description of factors that may cause the Company's actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 and other documents filed by the Company with the Securities and Exchange Commission.
Non GAAP Financial Measures
The Company makes reference to net operating income (“NOI”) and funds from operations (“FFO”). NOI is defined as operating revenues (minimum rents, including lease termination fees, tenant recoveries, overage rents, and other income) less property and related expenses (property operating expenses, real estate taxes, repairs and maintenance, marketing, and provision for doubtful accounts). We use FFO, as defined by the National Association of Real Estate Investment Trusts, as a supplemental measure of our operating performance. FFO is defined as net income (loss) allocable to common stockholders in accordance with GAAP, excluding impairment write-downs on depreciable real estate, gains (or losses) from cumulative effects of accounting changes, extraordinary items and sales of properties, and real estate related depreciation and amortization.
In order to present operations in a manner most relevant to its future operations, Core FFO and Core NOI have been presented to exclude certain non-cash and non-recurring revenue and expenses. A reconciliation of NOI to Core NOI and FFO to Core FFO has been included in the "Reconciliation of Core NOI and Core FFO" schedule attached to this release.
NOI, FFO and derivations thereof, are not alternatives to GAAP operating income (loss) or net income (loss) allocable to common stockholders. For reference, as an aid in understanding management's computation of NOI and FFO, a reconciliation of NOI to operating income and FFO to net income (loss) in accordance with GAAP has been included in the "Reconciliation of Non-GAAP to GAAP Financial Measures" schedule attached to this release.
About Rouse
Rouse is a publicly traded real estate investment trust headquartered in New York City and founded on a legacy of innovation and creativity. Among the country's largest publicly traded regional mall owners, the Company's geographically diverse portfolio spans the United States from coast to coast, and includes 36 malls and retail centers in 21 states encompassing over 24.9 million square feet of space. For more information, visit www.rouseproperties.com.
Consolidated Statements of Operations and Comprehensive Income (Loss)
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| | | | | | | | | | | | | | | |
| Three Months Ended | | Years Ended |
(In thousands, except per share amounts) | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) | | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) |
Revenues: | |
| | |
| | | | |
Minimum rents | $ | 57,733 |
| | $ | 55,747 |
| | $ | 212,072 |
| | $ | 200,354 |
|
Tenant recoveries | 20,377 |
| | 19,149 |
| | 78,287 |
| | 77,580 |
|
Overage rents | 4,168 |
| | 3,806 |
| | 7,372 |
| | 6,470 |
|
Other | 2,583 |
| | 3,013 |
| | 7,653 |
| | 7,723 |
|
Total revenues | 84,861 |
| | 81,715 |
| | 305,384 |
| | 292,127 |
|
Expenses: | |
| | |
| | | | |
Property operating costs | 17,268 |
| | 17,734 |
| | 68,770 |
| | 70,269 |
|
Real estate taxes | 7,026 |
| | 7,018 |
| | 27,075 |
| | 26,571 |
|
Property maintenance costs | 2,665 |
| | 3,161 |
| | 10,223 |
| | 11,331 |
|
Marketing | 789 |
| | 1,603 |
| | 2,146 |
| | 3,257 |
|
Provision for doubtful accounts | 429 |
| | 569 |
| | 1,746 |
| | 1,228 |
|
General and administrative | 6,132 |
| | 7,716 |
| | 25,817 |
| | 26,329 |
|
Provision for impairment | — |
| | 5,300 |
| | 2,900 |
| | 15,965 |
|
Depreciation and amortization | 35,221 |
| | 28,708 |
| | 107,941 |
| | 100,302 |
|
Other | 1,286 |
| | 2,805 |
| | 6,491 |
| | 5,437 |
|
Total operating expenses | 70,816 |
| | 74,614 |
| | 253,109 |
| | 260,689 |
|
Operating income | 14,045 |
| | 7,101 |
| | 52,275 |
| | 31,438 |
|
| | | | | | | |
Interest income | — |
| | 12 |
| | 18 |
| | 323 |
|
Interest expense | (16,675 | ) | | (19,670 | ) | | (71,420 | ) | | (82,909 | ) |
Gain on extinguishment of debt | (270 | ) | | — |
| | 26,558 |
| | — |
|
Income (loss) before income taxes, gain on sale of real estate assets, and discontinued operations | (2,900 | ) | | (12,557 | ) | | 7,431 |
| | (51,148 | ) |
Provision for income taxes | (95 | ) | | (154 | ) | | (604 | ) | | (537 | ) |
Income (loss) from continuing operations before gain on sale of real estate assets | (2,995 | ) | | (12,711 | ) | | 6,827 |
| | (51,685 | ) |
Gain on sale of real estate assets | 2,300 |
| | — |
| | 34,796 |
| | — |
|
Income (loss) from continuing operations | (695 | ) | | $ | (12,711 | ) | | $ | 41,623 |
| | $ | (51,685 | ) |
Discontinued operations | — |
| | — |
| | — |
| | — |
|
Net income (loss) | (695 | ) | | (12,711 | ) | | 41,623 |
| | (51,685 | ) |
Net (income) loss attributable to non-controlling interests | (32 | ) | | 122 |
| | 76 |
| | (71 | ) |
Net income (loss) attributable to Rouse Properties, Inc. | $ | (727 | ) | | $ | (12,589 | ) | | $ | 41,699 |
| | $ | (51,756 | ) |
Preferred distributions | (953 | ) | | — |
| | (953 | ) | | — |
|
Net income (loss) allocable to common shareholders | $ | (1,680 | ) | | $ | (12,589 | ) | | $ | 40,746 |
| | $ | (51,756 | ) |
| | | | | | | |
Per common share data: | | | | | | | |
Net income (loss) per share allocable to common shareholders | | | | | | | |
Basic | $ | (0.03 | ) | | $ | (0.22 | ) | | $ | 0.70 |
| | $ | (0.90 | ) |
Diluted | $ | (0.03 | ) | | $ | (0.22 | ) | | $ | 0.70 |
| | $ | (0.90 | ) |
| | | | | | | |
Dividends declared per share | $ | 0.18 |
| | $ | 0.17 |
| | $ | 0.72 |
| | $ | 0.68 |
|
| | | | | | | |
Other comprehensive income (loss): | | | | | | | |
Net income (loss) | $ | (695 | ) | | $ | (12,711 | ) | | $ | 41,623 |
| | $ | (51,685 | ) |
Other comprehensive income (loss): | | | | | | | |
Net unrealized gain (loss) on financial instrument | 1,743 |
| | (252 | ) | | 417 |
| | (482 | ) |
Comprehensive income (loss) | $ | 1,048 |
| | $ | (12,963 | ) | | $ | 42,040 |
| | $ | (52,167 | ) |
Consolidated Balance Sheets
|
| | | | | | | | |
(In thousands) | | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) |
| | | | |
Assets: | | |
| | |
|
Investment in real estate: | | |
| | |
|
Land | | $ | 428,157 |
| | $ | 371,363 |
|
Buildings and equipment | | 2,151,443 |
| | 1,820,072 |
|
Less accumulated depreciation | | (239,091 | ) | | (189,838 | ) |
Net investment in real estate | | 2,340,509 |
| | 2,001,597 |
|
Cash and cash equivalents | | 5,420 |
| | 14,308 |
|
Restricted cash | | 34,568 |
| | 48,055 |
|
Accounts receivable, net | | 43,196 |
| | 35,492 |
|
Deferred expenses, net | | 56,531 |
| | 52,611 |
|
Prepaid expenses and other assets, net | | 49,034 |
| | 62,690 |
|
Assets of property held for sale | | — |
| | 55,647 |
|
Total assets | | $ | 2,529,258 |
| | $ | 2,270,400 |
|
| | | | |
Liabilities: | | |
| | |
|
Mortgages, notes and loans payable | | $ | 1,706,513 |
| | $ | 1,584,499 |
|
Accounts payable and accrued expenses, net | | 147,288 |
| | 113,976 |
|
Liabilities of property held for sale | | — |
| | 38,590 |
|
Total liabilities | | 1,853,801 |
| | 1,737,065 |
|
| | | | |
Commitments and contingencies | | — |
| | — |
|
| | | | |
Mezzanine Equity: | | | | |
Non-controlling interest in Operating Partnership | | 140,953 |
| | — |
|
| | | | |
Equity: | | |
| | |
|
Preferred stock (1) | | — |
| | — |
|
Common stock (2) | | 581 |
| | 578 |
|
Additional paid-in capital | | 643,828 |
| | 679,275 |
|
Accumulated deficit | | (121,182 | ) | | (162,881 | ) |
Accumulated other comprehensive loss | | (65 | ) | | (482 | ) |
Treasury stock (3) | | (3,509 | ) | | — |
|
Total stockholders' equity | | 519,653 |
| | 516,490 |
|
Non-controlling interest | | 14,851 |
| | 16,845 |
|
Total equity | | 534,504 |
| | 533,335 |
|
Total liabilities, mezzanine equity and equity | | $ | 2,529,258 |
| | $ | 2,270,400 |
|
(1) Preferred stock: $0.01 par value; 50,000,000 shares authorized, 0 issued and outstanding at December 31, 2015 and 2014.
(2) Common stock: $0.01 par value; 500,000,000 shares authorized, 58,097,933 issued and 57,797,475 outstanding at December 31, 2015 and 57,748,141 issued and 57,743,981 outstanding at December 31, 2014.
(3)Treasury stock, at cost , $0.01 par value, 238,055 shares at December 31, 2015 and 0 shares at December 31, 2014
Reconciliation of Core NOI and Core FFO - For The Three Month Period Ended
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2015 | | December 31, 2014 |
(In thousands) | | (Unaudited) | | (Unaudited) |
| | Consolidated | | Noncontrolling Interest (1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO | | Consolidated | | Noncontrolling Interest (1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO |
| | | | | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Minimum rents (2) | | $ | 57,733 |
| | $ | (1,029 | ) | | $ | 56,704 |
| | $ | 597 |
| | $ | 57,301 |
| | $ | 55,747 |
| | $ | (1,129 | ) | | $ | 54,618 |
| | $ | 2,670 |
| | $ | 57,288 |
|
Tenant recoveries | | 20,377 |
| | (327 | ) | | 20,050 |
| | — |
| | 20,050 |
| | 19,149 |
| | (312 | ) | | 18,837 |
| | — |
| | 18,837 |
|
Overage rents | | 4,168 |
| | (45 | ) | | 4,123 |
| | — |
| | 4,123 |
| | 3,806 |
| | (26 | ) | | 3,780 |
| | — |
| | 3,780 |
|
Other | | 2,583 |
| | (26 | ) | | 2,557 |
| | — |
| | 2,557 |
| | 3,013 |
| | (33 | ) | | 2,980 |
| | — |
| | 2,980 |
|
Total revenues | | 84,861 |
| | (1,427 | ) | | 83,434 |
| | 597 |
| | 84,031 |
| | 81,715 |
| | (1,500 | ) | | 80,215 |
| | 2,670 |
| | 82,885 |
|
Operating Expenses: | |
| | | | | | | | | | | | | | | | | | |
Other property operating costs (3) | | 17,268 |
| | (226 | ) | | 17,042 |
| | (39 | ) | | 17,003 |
| | 17,734 |
| | (214 | ) | | 17,520 |
| | (39 | ) | | 17,481 |
|
Real estate taxes | | 7,026 |
| | (170 | ) | | 6,856 |
| | — |
| | 6,856 |
| | 7,018 |
| | (178 | ) | | 6,840 |
| | — |
| | 6,840 |
|
Property maintenance costs | | 2,665 |
| | (36 | ) | | 2,629 |
| | — |
| | 2,629 |
| | 3,161 |
| | (55 | ) | | 3,106 |
| | — |
| | 3,106 |
|
Marketing | | 789 |
| | (26 | ) | | 763 |
| | — |
| | 763 |
| | 1,603 |
| | (22 | ) | | 1,581 |
| | — |
| | 1,581 |
|
Provision for doubtful accounts | | 429 |
| | (12 | ) | | 417 |
| | — |
| | 417 |
| | 569 |
| | 16 |
| | 585 |
| | — |
| | 585 |
|
Total operating expenses | | 28,177 |
| | (470 | ) | | 27,707 |
| | (39 | ) | | 27,668 |
| | 30,085 |
| | (453 | ) | | 29,632 |
| | (39 | ) | | 29,593 |
|
| | | | | | | | | | | | | | | | | | | | |
Net operating income | | 56,684 |
| | (957 | ) | | 55,727 |
| | 636 |
| | 56,363 |
| | 51,630 |
| | (1,047 | ) | | 50,583 |
| | 2,709 |
| | 53,292 |
|
| | | | | | | | | | | | | | | | | | | | |
General and administrative (4)(5) | | 6,132 |
| | (1 | ) | | 6,131 |
| | — |
| | 6,131 |
| | 7,716 |
| | — |
| | 7,716 |
| | — |
| | 7,716 |
|
Other (6) | | 1,286 |
| | — |
| | 1,286 |
| | (1,286 | ) | | — |
| | 2,805 |
| | — |
| | 2,805 |
| | (2,805 | ) | | — |
|
Subtotal | | 49,266 |
| | (956 | ) | | 48,310 |
| | 1,922 |
| | 50,232 |
| | 41,109 |
| | (1,047 | ) | | 40,062 |
| | 5,514 |
| | 45,576 |
|
| | | | | | | | | | | | | | | | | | | | |
Interest income | | — |
| | — |
| | — |
| | — |
| | — |
| | 12 |
| | — |
| | 12 |
| | — |
| | 12 |
|
Interest expense | | | | | | | | | | | | | | | | | | | | |
Amortization and write-off of market rate adjustments | | 288 |
| | — |
| | 288 |
| | (288 | ) | | — |
| | 138 |
| | — |
| | 138 |
| | (138 | ) | | — |
|
Amortization and write-off of deferred financing costs | | (815 | ) | | — |
| | (815 | ) | | 815 |
| | — |
| | (789 | ) | | — |
| | (789 | ) | | 789 |
| | — |
|
Interest on debt | | (16,148 | ) | | 337 |
| | (15,811 | ) | | — |
| | (15,811 | ) | | (19,019 | ) | | 416 |
| | (18,603 | ) | | — |
| | (18,603 | ) |
Provision for income taxes | | (95 | ) | | — |
| | (95 | ) | | 95 |
| | — |
| | (154 | ) | | — |
| | (154 | ) | | 154 |
| | — |
|
Preferred distributions | | (953 | ) | | — |
| | (953 | ) | | — |
| | (953 | ) | | — |
| | — |
| | — |
| | — |
| | — |
|
Funds from operations | | $ | 31,543 |
| | $ | (619 | ) | | $ | 30,924 |
| | $ | 2,544 |
| | $ | 33,468 |
| | $ | 21,297 |
| | $ | (631 | ) | | $ | 20,666 |
| | $ | 6,319 |
| | $ | 26,985 |
|
Funds from operations per share - basic (7) | | | | | | | | | | $ | 0.58 |
| | | | | | | | | | $ | 0.47 |
|
Funds from operations per share - diluted (8) | | | | | | | | | | $ | 0.58 |
| | | | | | | | | | $ | 0.46 |
|
(1) Represents our partner's share of operations from consolidated properties.
(2) Core adjustments include the aggregate amounts for straight-line rent of $(460) and $(574), above / below market lease amortization of $1,092 and $3,237 and tenant inducement amortization of $(35) and $7 for the three months ended December 31, 2015 and 2014, respectively.
(3) Core adjustments include above / below market ground lease amortization of $39 for each of the three months ended December 31, 2015 and 2014.
(4) General and administrative costs include $679 and $962 of non-cash stock compensation expense for the three months ended December 31, 2015 and 2014, respectively.
(5) Core adjustments include amounts for the corporate and regional office straig ht-line rent of $3 and $0 for the three months ended December 31, 2015 and 2014, respectively.
(6) Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield's IT platform to Rouse's IT platform.
(7) Calculated using weighted average number of shares of common stock 57,939,535 and 57,531,859 for the three months ended December 31, 2015 and 2014, respectively.
(8) Assumes 58,159,126 and 58,105,232 of diluted shares of common stock for the three months ended December 31, 2015 and 2014, respectively
Reconciliation of Core NOI and Core FFO - For the Years Ended |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2015 | | December 31, 2014 |
(In thousands) | | (Unaudited) | | (Unaudited) |
| | Consolidated | | Noncontrolling Interest(1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO | | Consolidated | | Noncontrolling Interest(1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO |
| | | | | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Minimum rents (2) | | $ | 212,072 |
| | $ | (4,207 | ) | | $ | 207,865 |
| | $ | 5,472 |
| | $ | 213,337 |
| | $ | 200,354 |
| | $ | (1,498 | ) | | $ | 198,856 |
| | $ | 11,336 |
| | $ | 210,192 |
|
Tenant recoveries | | 78,287 |
| | (1,373 | ) | | 76,914 |
| | — |
| | 76,914 |
| | 77,580 |
| | (433 | ) | | 77,147 |
| | — |
| | 77,147 |
|
Overage rents | | 7,372 |
| | (78 | ) | | 7,294 |
| | — |
| | 7,294 |
| | 6,470 |
| | (28 | ) | | 6,442 |
| | — |
| | 6,442 |
|
Other | | 7,653 |
| | (85 | ) | | 7,568 |
| | — |
| | 7,568 |
| | 7,723 |
| | (35 | ) | | 7,688 |
| | — |
| | 7,688 |
|
Total revenues | | 305,384 |
| | (5,743 | ) | | 299,641 |
| | 5,472 |
| | 305,113 |
| | 292,127 |
| | (1,994 | ) | | 290,133 |
| | 11,336 |
| | 301,469 |
|
Operating Expenses: | | | | | | | | | | | | | | | | | | | | |
Property operating costs (3) | | 68,770 |
| | (1,035 | ) | | 67,735 |
| | (155 | ) | | 67,580 |
| | 70,269 |
| | (274 | ) | | 69,995 |
| | (145 | ) | | 69,850 |
|
Real estate taxes | | 27,075 |
| | (747 | ) | | 26,328 |
| | — |
| | 26,328 |
| | 26,571 |
| | (236 | ) | | 26,335 |
| | — |
| | 26,335 |
|
Property maintenance costs | | 10,223 |
| | (136 | ) | | 10,087 |
| | — |
| | 10,087 |
| | 11,331 |
| | (60 | ) | | 11,271 |
| | — |
| | 11,271 |
|
Marketing | | 2,146 |
| | (56 | ) | | 2,090 |
| | — |
| | 2,090 |
| | 3,257 |
| | (23 | ) | | 3,234 |
| | — |
| | 3,234 |
|
Provision for doubtful accounts | | 1,746 |
| | 4 |
| | 1,750 |
| | — |
| | 1,750 |
| | 1,228 |
| | 16 |
| | 1,244 |
| | — |
| | 1,244 |
|
Total operating expenses | | 109,960 |
| | (1,970 | ) | | 107,990 |
| | (155 | ) | | 107,835 |
| | 112,656 |
| | (577 | ) | | 112,079 |
| | (145 | ) | | 111,934 |
|
| | | | | | | | | | | | | | | | | | | | |
Net operating income | | 195,424 |
| | (3,773 | ) | | 191,651 |
| | 5,627 |
| | 197,278 |
| | 179,471 |
| | (1,417 | ) | | 178,054 |
| | 11,481 |
| | 189,535 |
|
| | | | | | | | | | | | | | | | | | | | |
General and administrative (4)(5) | | 25,817 |
| | (1 | ) | | 25,816 |
| | (17 | ) | | 25,799 |
| | 26,329 |
| | — |
| | 26,329 |
| | (56 | ) | | 26,273 |
|
Other (6) | | 6,491 |
| | — |
| | 6,491 |
| | (6,491 | ) | | — |
| | 5,437 |
| | — |
| | 5,437 |
| | (5,437 | ) | | — |
|
Subtotal | | 163,116 |
| | (3,772 | ) | | 159,344 |
| | 12,135 |
| | 171,479 |
| | 147,705 |
| | (1,417 | ) | | 146,288 |
| | 16,974 |
| | 163,262 |
|
| | | | | | | | | | | | | | | | | | | | |
Interest income | | 18 |
| | | | 18 |
| | — |
| | 18 |
| | 323 |
| | — |
| | 323 |
| | — |
| | 323 |
|
Interest expense | | | | | | | | | | | | | | | | | | | | |
Amortization and write-off of market rate adjustments | | 804 |
| | — |
| | 804 |
| | (804 | ) | | — |
| | (8,878 | ) | | — |
| | (8,878 | ) | | 8,878 |
| | — |
|
Amortization and write-off of deferred financing costs | | (4,214 | ) | | — |
| | (4,214 | ) | | 4,214 |
| | — |
| | (4,209 | ) | | — |
| | (4,209 | ) | | 4,209 |
| | — |
|
Debt extinguishment costs | | (7 | ) | | — |
| | (7 | ) | | 7 |
| | — |
| | (259 | ) | | — |
| | (259 | ) | | 259 |
| | — |
|
Interest on debt | | (68,003 | ) | | 1,420 |
| | (66,583 | ) | | — |
| | (66,583 | ) | | (69,563 | ) | | 494 |
| | (69,069 | ) | | — |
| | (69,069 | ) |
Provision for income taxes | | (604 | ) | | — |
| | (604 | ) | | 604 |
| | — |
| | (537 | ) | | — |
| | (537 | ) | | 537 |
| | — |
|
Preferred distributions | | (953 | ) | | | | (953 | ) | | — |
| | (953 | ) | | — |
| | — |
| | — |
| | — |
| | — |
|
Funds from operations | | $ | 90,157 |
| | $ | (2,352 | ) | | $ | 87,805 |
| | $ | 16,156 |
| | $ | 103,961 |
| | $ | 64,582 |
| | $ | (923 | ) | | $ | 63,659 |
| | $ | 30,857 |
| | $ | 94,516 |
|
Funds from operations per share - basic (7) | | | | | | | | | | $ | 1.80 |
| | | | | | | | | | $ | 1.65 |
|
Funds from operations per share - diluted (8) | | | | | | | | | | $ | 1.79 |
| | | | | | | | | | $ | 1.64 |
|
(1) Represents our partner's share of operations from consolidated properties.
(2) Core adjustments includes the aggregate amounts for straight-line rent of $(1,162) and $(1,757), above / below market lease amortization of $6,562 and $13,066 and tenant inducement amortization of $72 and $28 for the years ended December 31, 2015 and 2014, respectively.
(3) Core adjustments include above / below market ground lease amortization of $155 and $145 for the years ended December 31, 2015 and 2014, respectively.
(4) General and administrative costs include $2,899 and $3,699 of non-cash stock compensation expense for the years ended December 31, 2015 and 2014, respectively.
(5) Core adjustments include amounts for the corporate and regional office straight-line rent of $17 and $56 for the years ended December 31, 2015 and 2014, respectively.
(6) Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield's IT platform on to Rouse's IT platform.
(7) Calculated using weighted average number of shares of 57,802,287 and 57,203,196 for the years ended December 31, 2015 and 2014, respectively.
(8) Assumes 58,116,256 and 57,742,725 of diluted common shares for the years ended December 31, 2015 and 2014, respectively.
Reconciliation of Non-GAAP to GAAP Financial Measures
|
| | | | | | | | | | | | | | | |
| Three Months Ended | | Years Ended |
(In thousands) | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) | | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) |
| | | | | | | |
Reconciliation of NOI to GAAP Operating Income | | | | | | | |
Rouse NOI | $ | 55,727 |
| | $ | 50,583 |
| | $ | 191,651 |
| | $ | 178,054 |
|
Non-controlling interests | 957 |
| | 1,047 |
| | 3,773 |
| | 1,417 |
|
General and administrative | (6,132 | ) | | (7,716 | ) | | (25,817 | ) | | (26,329 | ) |
Other | (1,286 | ) | | (2,805 | ) | | (6,491 | ) | | (5,437 | ) |
Depreciation and amortization | (35,221 | ) | | (28,708 | ) | | (107,941 | ) | | (100,302 | ) |
Provision for impairment | — |
| | (5,300 | ) | | (2,900 | ) | | (15,965 | ) |
Operating income | $ | 14,045 |
| | $ | 7,101 |
| | $ | 52,275 |
| | $ | 31,438 |
|
| | | | | | | |
Reconciliation of FFO to GAAP Net income (loss) allocable to common shareholders | | | | | | | |
FFO | $ | 30,924 |
| | $ | 20,666 |
| | $ | 87,805 |
| | $ | 63,659 |
|
Non-controlling interests - Depreciation and amortization/Other | 587 |
| | 753 |
| | 2,428 |
| | 852 |
|
Depreciation and amortization | (35,221 | ) | | (28,708 | ) | | (107,941 | ) | | (100,302 | ) |
Provision for impairment | — |
| | (5,300 | ) | | (2,900 | ) | | (15,965 | ) |
Gain (loss) on extinguishment of debt | (270 | ) | | — |
| | 26,558 |
| | — |
|
Gain on sale of real estate assets | 2,300 |
| | — |
| | 34,796 |
| | — |
|
Net income (loss) allocable to common shareholders | $ | (1,680 | ) | | $ | (12,589 | ) | | $ | 40,746 |
| | $ | (51,756 | ) |
| | | | | | | |
Weighted average number of shares outstanding - Basic | 57,939,535 |
| | 57,531,859 |
| | 57,802,287 |
| | 57,203,196 |
|
| | | | | | | |
Weighted average number of shares outstanding - Diluted | 57,939,535 |
| | 57,531,859 |
| | 58,116,256 |
| | 57,203,196 |
|
| | | | | | | |
Per common share data: | | | | | | | |
Net income (loss) per share allocable to common shareholders | | | | | | | |
Basic | $ | (0.03 | ) | | $ | (0.22 | ) | | $ | 0.70 |
| | $ | (0.90 | ) |
Diluted | $ | (0.03 | ) | | $ | (0.22 | ) | | $ | 0.70 |
| | $ | (0.90 | ) |
.
Source: Rouse Properties, Inc.
Rouse Properties, Inc.
Investor Relations, 212-608-5108
IR@rouseproperties.com
Supplemental Information
for the Quarter Ended December 31, 2015
Basis of Presentation
Background
Rouse is a publicly traded real estate investment trust (REIT) focused on the management, redevelopment, repositioning and acquisition of regional malls and the portfolio at the end of the quarter consisted of 36 geographically diverse malls and retail centers, encompassing over 24.9 million square feet in 21 states. On January 12, 2012, General Growth Properties, Inc. (NYSE: GGP) completed the spin-off of Rouse Properties, Inc. (NYSE: RSE) through the distribution of shares of Rouse common stock to holders of GGP common stock. On March 26, 2012, Rouse completed its rights offering and issued 13,333,333 shares of common stock for $191.6 million of net proceeds. On January 13, 2014, Rouse issued 8,050,000 shares of common stock in its equity offering for $150.7 million of net proceeds before deducting for offering expenses.
General Information
Unless the context indicates otherwise, references in the accompanying financial information (the "Supplemental") to the "Corporation", "Rouse", or the "Company" refer to Rouse Properties Inc. Additionally, where reference is made to "GAAP", this refers to accounting principles generally accepted in the United States.
Non-GAAP Measures
The Company makes reference to net operating income (“NOI”) and funds from operations (“FFO”). NOI is defined as operating revenues (minimum rents, including lease termination fees, tenant recoveries, overage rents, and other income) less property and related expenses (property operating expenses, real estate taxes, repairs and maintenance, marketing, other property operating costs, and provision for doubtful accounts). FFO is defined as net income (loss) allocable to common stockholders in accordance with GAAP, excluding impairment write-downs on depreciable real estate, gains (or losses) from cumulative effects of accounting changes, extraordinary items and sales of properties, plus real estate related depreciation and amortization.
The Company also adjusts for the portion of consolidated net income (loss) attributable to non-controlling interests of joint venture partners to reflect FFO allocable to the Company's common shareholders.
In order to present operations in a manner most relevant to its future operations, Core FFO and Core NOI have been presented to exclude certain non-cash and non-recurring revenue and expenses. A reconciliation of NOI to Core NOI and FFO to Core FFO has been included in the "Reconciliation of Core NOI and Core FFO" schedule included within.
NOI, FFO and derivations thereof, are not alternatives to GAAP operating income (loss) or net income (loss) allocable to common stockholders. For reference, as an aid in understanding management's computation of NOI and FFO, a reconciliation of NOI to operating income and FFO to net income (loss) in accordance with GAAP has been included in the "Reconciliation of Non-GAAP to GAAP Financial Measures" schedule.
Table of Contents ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
|
| | |
| | Page |
Company Information | | |
| | |
Financial Overview | | |
Consolidated Balance Sheets | | |
Consolidated Statements of Operations and Comprehensive Income (Loss) | | |
| | |
Financial Schedules | | |
Reconciliation of Core NOI and Core FFO - For the Three Month Period Ended | | |
Reconciliation of Core NOI and Core FFO - For the Year Ended | | |
Core NOI Summary | | |
Reconciliation of Non-GAAP to GAAP Financial Measures | | |
Mortgages, Notes and Loans Payable | | |
Prepaid Expenses and Other Assets and Accounts Payable and Accrued Expenses | | |
| | |
Portfolio Operating Metrics | | |
Capital Expenditures | | |
Key Operating Performance Indicators | | |
Summary of Properties | | |
Lease Expiration Schedule | | |
Top Ten Tenants | | |
Leasing Activity | | |
| | |
Glossary of Terms | | |
The presentation contains forward-looking statements. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons. Readers are referred to the documents filed by Rouse Properties, Inc. with the Securities and Exchange Commission, which further identify the important risk factors which could cause actual results to differ materially from the forward-looking statements in the Supplemental. The Company disclaims any obligation to update any forward-looking statements.
Company Information
Company Contacts
|
| | | |
Andrew Silberfein | Chief Executive Officer | | |
Brian Harper | Chief Operating Officer | | |
John Wain | Chief Financial Officer | | |
Susan Elman | Executive Vice President, General Counsel | | |
Michael Grant | Chief Accounting Officer | | |
Brad Cohen/Steve Swett | ICR, Investor Relations and Communications | ir@rouseproperties.com | (212) 608-5108 |
Research Coverage
|
| | | |
Bank of America/Merrill Lynch | Craig Schmidt | craig.schmidt@baml.com | (646) 855-3640 |
Barclays Capital | Ross Smotrich | ross.smotrich@barcap.com | (212) 526-2306 |
Boenning & Scattergood | Floris Van Dijkum | fvandijkum@boenninginc.com | (212) 209-3916 |
Canaccord Genuity | Paul Morgan | pmorgan@canaccordgenuity.com | (415) 325-7269 |
Green Street Advisors | Daniel Busch | dbusch@greenstreetadvisors.com | (949) 640-8780 |
KeyBanc | Todd Thomas | tthomas@key.com | (917) 368-2286 |
RBC | Richard Moore | rich.moore@rbccm.com | (440) 715-2646 |
Stifel Nicolaus | Nathan Isbee | isbeen@stifel.com | (443) 224-1346 |
Common Share Trading Statistics
|
| | | | | | | | | | | | | | | | |
| | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
High | | $ | 18.61 |
| | $ | 18.19 |
| | $ | 19.44 |
| | $ | 21.17 |
|
Low | | $ | 14.09 |
| | $ | 15.15 |
| | $ | 16.01 |
| | $ | 17.18 |
|
Close | | $ | 14.56 |
| | $ | 15.58 |
| | $ | 16.35 |
| | $ | 18.96 |
|
Volume | | 16,646,100 |
| | 12,721,400 |
| | 11,173,200 |
| | 15,911,500 |
|
|
| | |
Q4 2015 Supplemental Package | | 3 |
Shares Outstanding
|
| | | | | | | | | | | |
| Three Months Ended | | Years Ended |
| December 31, 2015 | | December 31, 2014 | | December 31, 2015 | | December 31, 2014 |
Total common shares outstanding | 57,797,475 |
| | 57,743,981 |
| | 57,797,475 |
| | 57,743,981 |
|
Net number of common shares issuable assuming exercise of stock options (1) | 147,106 |
| | 573,373 |
| | 246,842 |
| | 573,273 |
|
Total common shares - diluted | 57,944,581 |
| | 58,317,354 |
| | 58,044,317 |
| | 58,317,254 |
|
Weighted average common shares outstanding - diluted (FFO)(2) | 58,159,126 |
| | 58,105,232 |
| | 58,116,256 |
| | 57,742,725 |
|
Weighted average common shares outstanding - basic (3) | 57,939,535 |
| | 57,531,859 |
| | 57,802,287 |
| | 57,203,196 |
|
Weighted average common shares outstanding - diluted (3)(4) | 57,939,535 |
| | 57,531,859 |
| | 58,116,256 |
| | 57,203,196 |
|
`
(1) Based upon the weighted average stock price for the three months and years ended December 31, 2015 and 2014.
(2) Utilized for Funds From Operations (FFO) and Core Funds From Operations (Core FFO) purposes.
(3) Calculated in accordance with GAAP for the three months and years ended December 31, 2015 and 2014.
(4) Dilutive shares are excluded for the three months ended December 31, 2015 and 2014 and for the year ended December 31, 2014 as the Company was in a net loss from continuing operations position.
|
| | |
Q4 2015 Supplemental Package | | 4 |
Financial Overview ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Consolidated Balance Sheets
|
| | | | | | | | |
(In thousands) |
| December 31, 2015 (Unaudited) |
| December 31, 2014 (Unaudited) |
|
|
|
|
|
Assets: |
| |
|
| |
|
Investment in real estate: |
| |
|
| |
|
Land |
| $ | 428,157 |
|
| $ | 371,363 |
|
Buildings and equipment |
| 2,151,443 |
|
| 1,820,072 |
|
Less accumulated depreciation |
| (239,091 | ) |
| (189,838 | ) |
Net investment in real estate |
| 2,340,509 |
| | 2,001,597 |
|
Cash and cash equivalents |
| 5,420 |
|
| 14,308 |
|
Restricted cash | | 34,568 |
| | 48,055 |
|
Accounts receivable, net |
| 43,196 |
|
| 35,492 |
|
Deferred expenses, net |
| 56,531 |
|
| 52,611 |
|
Prepaid expenses and other assets, net |
| 49,034 |
|
| 62,690 |
|
Assets of property held for sale | | — |
| | 55,647 |
|
Total assets |
| $ | 2,529,258 |
| | $ | 2,270,400 |
|
|
|
|
|
|
|
|
Liabilities: |
| |
|
| |
|
Mortgages, notes and loans payable |
| $ | 1,706,513 |
|
| $ | 1,584,499 |
|
Accounts payable and accrued expenses, net |
| 147,288 |
|
| 113,976 |
|
Liabilities of property held for sale | | — |
| | 38,590 |
|
Total liabilities |
| 1,853,801 |
| | 1,737,065 |
|
|
|
|
|
|
|
|
Commitments and contingencies |
| — |
|
| — |
|
|
|
|
|
|
|
|
Mezzanine Equity: | | | | |
Non-controlling interest in Operating Partnership | | 140,953 |
| | — |
|
| | | | |
Equity: |
| |
|
| |
|
Preferred stock (1) | | — |
| | — |
|
Common stock (2) |
| 581 |
| | 578 |
|
Additional paid-in capital |
| 643,828 |
| | 679,275 |
|
Accumulated deficit |
| (121,182 | ) | | (162,881 | ) |
Accumulated other comprehensive loss | | (65 | ) | | (482 | ) |
Treasury stock (3) | | (3,509 | ) | | — |
|
Total stockholders' equity |
| 519,653 |
|
| 516,490 |
|
Non-controlling interest |
| 14,851 |
| | 16,845 |
|
Total equity |
| 534,504 |
|
| 533,335 |
|
Total liabilities, mezzanine equity and equity |
| $ | 2,529,258 |
|
| $ | 2,270,400 |
|
(1) Preferred stock: $0.01 par value; 50,000,000 shares authorized, 0 issued and outstanding at December 31, 2015 and 2014.
(2) Common stock: $0.01 par value; 500,000,000 shares authorized, 58,097,933 issued and 57,797,475 outstanding at December 31, 2015 and 57,748,141 issued and 57,743,981 outstanding at December 31, 2014.
(3)Treasury stock, at cost , $0.01 par value, 238,055 shares at December 31, 2015 and 0 shares at December 31, 2014.
|
| | |
Q4 2015 Supplemental Package | | 5 |
Financial Overview
Consolidated Statements of Operations and Comprehensive Income and (Loss) |
| | | | | | | | | | | | | | | |
| Three Months Ended | | Years Ended |
(In thousands, except per share amounts) | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) |
| December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) |
Revenues: | |
| | |
| | | | |
Minimum rents | $ | 57,733 |
| | $ | 55,747 |
| | $ | 212,072 |
| | $ | 200,354 |
|
Tenant recoveries | 20,377 |
| | 19,149 |
| | 78,287 |
| | 77,580 |
|
Overage rents | 4,168 |
| | 3,806 |
| | 7,372 |
| | 6,470 |
|
Other | 2,583 |
| | 3,013 |
| | 7,653 |
| | 7,723 |
|
Total revenues | 84,861 |
| | 81,715 |
| | 305,384 |
| | 292,127 |
|
Expenses: | |
| | |
| | | | |
Property operating costs | 17,268 |
| | 17,734 |
| | 68,770 |
| | 70,269 |
|
Real estate taxes | 7,026 |
| | 7,018 |
| | 27,075 |
| | 26,571 |
|
Property maintenance costs | 2,665 |
| | 3,161 |
| | 10,223 |
| | 11,331 |
|
Marketing | 789 |
| | 1,603 |
| | 2,146 |
| | 3,257 |
|
Provision for doubtful accounts | 429 |
| | 569 |
| | 1,746 |
| | 1,228 |
|
General and administrative | 6,132 |
| | 7,716 |
| | 25,817 |
| | 26,329 |
|
Provision for impairment | — |
| | 5,300 |
| | 2,900 |
| | 15,965 |
|
Depreciation and amortization | 35,221 |
| | 28,708 |
| | 107,941 |
| | 100,302 |
|
Other | 1,286 |
| | 2,805 |
| | 6,491 |
| | 5,437 |
|
Total operating expenses | 70,816 |
| | 74,614 |
| | 253,109 |
| | 260,689 |
|
Operating income | 14,045 |
| | 7,101 |
| | 52,275 |
| | 31,438 |
|
| | | | | | | |
Interest income | — |
| | 12 |
| | 18 |
| | 323 |
|
Interest expense | (16,675 | ) | | (19,670 | ) | | (71,420 | ) | | (82,909 | ) |
Gain (loss) on extinguishment of debt | (270 | ) | | — |
| | 26,558 |
| | — |
|
Income (loss) before income taxes, gain on sale of real estate assets, and discontinued operations | (2,900 | ) | | (12,557 | ) | | 7,431 |
| | (51,148 | ) |
Provision for income taxes | (95 | ) | | (154 | ) | | (604 | ) | | (537 | ) |
Income (loss) from continuing operations before gain on sale of real estate assets | (2,995 | ) | | (12,711 | ) | | 6,827 |
| | (51,685 | ) |
Gain on sale of real estate assets | 2,300 |
| | — |
| | 34,796 |
| | — |
|
Income (loss) from continuing operations | (695 | ) | | (12,711 | ) | | 41,623 |
| | (51,685 | ) |
Discontinued operations | — |
| | — |
| | — |
| | — |
|
Net income (loss) | (695 | ) | | (12,711 | ) | | 41,623 |
| | (51,685 | ) |
Net (income) loss attributable to non-controlling interests | (32 | ) | | 122 |
| | 76 |
| | (71 | ) |
Net income (loss) attributable to Rouse Properties, Inc. | $ | (727 | ) | | $ | (12,589 | ) | | $ | 41,699 |
| | $ | (51,756 | ) |
Preferred distributions | (953 | ) | | — |
| | (953 | ) | | — |
|
Net income (loss) allocable to common shareholders | $ | (1,680 | ) | | $ | (12,589 | ) | | $ | 40,746 |
| | $ | (51,756 | ) |
| | | | | | | |
Per common share data: | | | | | | | |
Net income (loss) per share allocable to common shareholders | | | | | | | |
Basic | $ | (0.03 | ) | | $ | (0.22 | ) | | $ | 0.70 |
| | $ | (0.90 | ) |
Diluted | $ | (0.03 | ) | | $ | (0.22 | ) | | $ | 0.70 |
| | $ | (0.90 | ) |
| | | | | | | |
Dividends declared per share | $ | 0.18 |
| | $ | 0.17 |
| | $ | 0.72 |
| | $ | 0.68 |
|
| | | | | | | |
Other comprehensive income (loss): | | | | | | | |
Net income (loss) | $ | (695 | ) | | $ | (12,711 | ) | | $ | 41,623 |
| | $ | (51,685 | ) |
Other comprehensive income (loss): | | | | | | | |
Net unrealized gain (loss) on financial instrument | 1,743 |
| | (252 | ) | | 417 |
| | (482 | ) |
Comprehensive income (loss) | $ | 1,048 |
| | $ | (12,963 | ) | | $ | 42,040 |
| | $ | (52,167 | ) |
|
| | |
Q4 2015 Supplemental Package | | 6 |
Financial Schedules
Reconciliation of Core NOI and Core FFO - For the Three Month Periods Ended |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| December 31, 2015 | | December 31, 2014 |
(In thousands) |
| (Unaudited) | | (Unaudited) |
|
| Consolidated |
| Noncontrolling Interest(1) | | Rouse Total |
| Core Adjustments |
| Core NOI / FFO | | Consolidated |
| Noncontrolling Interest(1) | | Rouse Total |
| Core Adjustments |
| Core NOI / FFO |
| | | | | | | | | | | | | | | | | | | | |
Revenues: |
|
|
| | |
|
|
|
|
| |
|
| | |
|
|
|
|
|
Minimum rents (2) |
| $ | 57,733 |
|
| $ | (1,029 | ) | | $ | 56,704 |
|
| $ | 597 |
|
| $ | 57,301 |
| | $ | 55,747 |
|
| $ | (1,129 | ) | | $ | 54,618 |
|
| $ | 2,670 |
|
| $ | 57,288 |
|
Tenant recoveries |
| 20,377 |
|
| (327 | ) | | 20,050 |
|
| — |
|
| 20,050 |
| | 19,149 |
|
| (312 | ) | | 18,837 |
|
| — |
|
| 18,837 |
|
Overage rents |
| 4,168 |
|
| (45 | ) | | 4,123 |
|
| — |
|
| 4,123 |
| | 3,806 |
|
| (26 | ) | | 3,780 |
|
| — |
|
| 3,780 |
|
Other |
| 2,583 |
|
| (26 | ) | | 2,557 |
|
| — |
|
| 2,557 |
| | 3,013 |
|
| (33 | ) | | 2,980 |
|
| — |
|
| 2,980 |
|
Total revenues |
| 84,861 |
|
| (1,427 | ) | | 83,434 |
|
| 597 |
|
| 84,031 |
|
| 81,715 |
|
| (1,500 | ) | | 80,215 |
|
| 2,670 |
|
| 82,885 |
|
Operating Expenses: |
|
|
| | |
|
|
|
|
| |
|
| | |
|
|
|
|
|
Property operating costs (3) | | 17,268 |
| | (226 | ) | | 17,042 |
| | (39 | ) | | 17,003 |
| | 17,734 |
| | (214 | ) | | 17,520 |
| | (39 | ) | | 17,481 |
|
Real estate taxes |
| 7,026 |
|
| (170 | ) | | 6,856 |
|
| — |
|
| 6,856 |
| | 7,018 |
|
| (178 | ) | | 6,840 |
|
| — |
|
| 6,840 |
|
Property maintenance costs |
| 2,665 |
|
| (36 | ) | | 2,629 |
|
| — |
|
| 2,629 |
| | 3,161 |
|
| (55 | ) | | 3,106 |
|
| — |
|
| 3,106 |
|
Marketing |
| 789 |
|
| (26 | ) | | 763 |
|
| — |
|
| 763 |
| | 1,603 |
|
| (22 | ) | | 1,581 |
|
| — |
|
| 1,581 |
|
Provision for doubtful accounts |
| 429 |
|
| (12 | ) | | 417 |
|
| — |
|
| 417 |
| | 569 |
|
| 16 |
| | 585 |
|
| — |
|
| 585 |
|
Total operating expenses |
| 28,177 |
|
| (470 | ) | | 27,707 |
|
| (39 | ) |
| 27,668 |
| | 30,085 |
|
| (453 | ) | | 29,632 |
|
| (39 | ) |
| 29,593 |
|
| | | | | | | | | | | | | | | | | | | | |
Net operating income |
| 56,684 |
|
| (957 | ) | | 55,727 |
|
| 636 |
|
| 56,363 |
| | 51,630 |
|
| (1,047 | ) | | 50,583 |
|
| 2,709 |
|
| 53,292 |
|
| |
| | | | | | | |
| |
| | | | | | | |
|
General and administrative (4)(5) |
| 6,132 |
|
| (1 | ) | | 6,131 |
|
| — |
|
| 6,131 |
| | 7,716 |
|
| — |
| | 7,716 |
|
| — |
|
| 7,716 |
|
Other (6) |
| 1,286 |
|
| — |
| | 1,286 |
|
| (1,286 | ) |
| — |
| | 2,805 |
|
| — |
| | 2,805 |
|
| (2,805 | ) |
| — |
|
Subtotal |
| 49,266 |
|
| (956 | ) | | 48,310 |
|
| 1,922 |
|
| 50,232 |
| | 41,109 |
|
| (1,047 | ) | | 40,062 |
|
| 5,514 |
|
| 45,576 |
|
| |
| | | | | | | |
| |
| | | | | | | |
|
Interest income |
| — |
|
| — |
| | — |
|
| — |
|
| — |
| | 12 |
|
| — |
| | 12 |
|
| — |
|
| 12 |
|
Interest expense |
|
| | | |
| | | |
| |
| | | | | | | |
|
Amortization and write-off of market rate adjustments |
| 288 |
|
| — |
| | 288 |
|
| (288 | ) |
| — |
| | 138 |
|
| — |
| | 138 |
|
| (138 | ) |
| — |
|
Amortization and write-off of deferred financing costs |
| (815 | ) |
| — |
| | (815 | ) |
| 815 |
|
| — |
| | (789 | ) |
| — |
| | (789 | ) |
| 789 |
|
| — |
|
Interest on debt |
| (16,148 | ) |
| 337 |
| | (15,811 | ) |
| — |
|
| (15,811 | ) | | (19,019 | ) |
| 416 |
| | (18,603 | ) |
| — |
|
| (18,603 | ) |
Provision for income taxes |
| (95 | ) |
| — |
| | (95 | ) |
| 95 |
|
| — |
| | (154 | ) |
| — |
| | (154 | ) |
| 154 |
|
| — |
|
Preferred distributions | | (953 | ) | | — |
| | (953 | ) | | — |
| | (953 | ) | | — |
| | — |
| | — |
| | — |
| | — |
|
Funds from operations |
| $ | 31,543 |
|
| $ | (619 | ) | | $ | 30,924 |
|
| $ | 2,544 |
|
| $ | 33,468 |
| | $ | 21,297 |
|
| $ | (631 | ) | | $ | 20,666 |
|
| $ | 6,319 |
|
| $ | 26,985 |
|
Funds from operations per share - basic (7) |
|
|
| | |
|
|
|
| $ | 0.58 |
| |
|
| | |
|
|
|
| $ | 0.47 |
|
Funds from operations per share - diluted (8) |
|
|
| | |
|
|
|
| $ | 0.58 |
| |
|
| | |
|
|
|
| $ | 0.46 |
|
(1) Represents our partner's share of operations from consolidated properties.
(2) Core adjustments include the aggregate amounts for straight-line rent of $(460) and $(574), above / below market lease amortization of $1,092 and $3,237 and tenant inducement amortization of $(35) and $7 for the three months ended December 31, 2015 and 2014, respectively.
(3) Core adjustments include above / below market ground lease amortization of $39 for each of the three months ended December 31, 2015 and 2014.
(4) General and administrative costs include $679 and $962 of non-cash stock compensation expense for the three months ended December 31, 2015 and 2014, respectively.
(5) Core adjustments include amounts for the corporate and regional office straight-line rent of $3 and $0 for the three months ended December 31, 2015 and 2014, respectively.
(6) Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield's IT platform to Rouse's IT platform.
(7) Calculated using weighted average number of shares of common stock 57,939,535 and 57,531,859 for the three months ended December 31, 2015 and 2014, respectively.
(8) Assumes 58,159,126 and 58,105,232 of diluted shares of common stock for the three months ended December 31, 2015 and 2014, respectively.
|
| | |
Q4 2015 Supplemental Package | | 7 |
Financial Schedules
Reconciliation of Core NOI and Core FFO - For the Years Ended |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2015 | | December 31, 2014 |
(In thousands) | | (Unaudited) | | (Unaudited) |
| | Consolidated | | Noncontrolling Interest(1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO | | Consolidated | | Noncontrolling Interest(1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO |
| | | | | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Minimum rents (2) | | $ | 212,072 |
| | $ | (4,207 | ) | | $ | 207,865 |
| | $ | 5,472 |
| | $ | 213,337 |
| | $ | 200,354 |
| | $ | (1,498 | ) | | $ | 198,856 |
| | $ | 11,336 |
| | $ | 210,192 |
|
Tenant recoveries | | 78,287 |
| | (1,373 | ) | | 76,914 |
| | — |
| | 76,914 |
| | 77,580 |
| | (433 | ) | | 77,147 |
| | — |
| | 77,147 |
|
Overage rents | | 7,372 |
| | (78 | ) | | 7,294 |
| | — |
| | 7,294 |
| | 6,470 |
| | (28 | ) | | 6,442 |
| | — |
| | 6,442 |
|
Other | | 7,653 |
| | (85 | ) | | 7,568 |
| | — |
| | 7,568 |
| | 7,723 |
| | (35 | ) | | 7,688 |
| | — |
| | 7,688 |
|
Total revenues | | 305,384 |
| | (5,743 | ) | | 299,641 |
| | 5,472 |
| | 305,113 |
| | 292,127 |
| | (1,994 | ) | | 290,133 |
| | 11,336 |
| | 301,469 |
|
Operating Expenses: | | | | | | | | | | | | | | | | | | | | |
Property operating costs (3) | | 68,770 |
| | (1,035 | ) | | 67,735 |
| | (155 | ) | | 67,580 |
| | 70,269 |
| | (274 | ) | | 69,995 |
| | (145 | ) | | 69,850 |
|
Real estate taxes | | 27,075 |
| | (747 | ) | | 26,328 |
| | — |
| | 26,328 |
| | 26,571 |
| | (236 | ) | | 26,335 |
| | — |
| | 26,335 |
|
Property maintenance costs | | 10,223 |
| | (136 | ) | | 10,087 |
| | — |
| | 10,087 |
| | 11,331 |
| | (60 | ) | | 11,271 |
| | — |
| | 11,271 |
|
Marketing | | 2,146 |
| | (56 | ) | | 2,090 |
| | — |
| | 2,090 |
| | 3,257 |
| | (23 | ) | | 3,234 |
| | — |
| | 3,234 |
|
Provision for doubtful accounts | | 1,746 |
| | 4 |
| | 1,750 |
| | — |
| | 1,750 |
| | 1,228 |
| | 16 |
| | 1,244 |
| | — |
| | 1,244 |
|
Total operating expenses | | 109,960 |
| | (1,970 | ) | | 107,990 |
| | (155 | ) | | 107,835 |
| | 112,656 |
| | (577 | ) | | 112,079 |
| | (145 | ) | | 111,934 |
|
| | | | | | | | | | | | | | | | | | | | |
Net operating income | | 195,424 |
| | (3,773 | ) | | 191,651 |
| | 5,627 |
| | 197,278 |
| | 179,471 |
| | (1,417 | ) | | 178,054 |
| | 11,481 |
| | 189,535 |
|
| |
| | | | | | | |
| |
| | | | | | | |
|
General and administrative (4)(5) | | 25,817 |
| | (1 | ) | | 25,816 |
| | (17 | ) | | 25,799 |
| | 26,329 |
| | — |
| | 26,329 |
| | (56 | ) | | 26,273 |
|
Other (6) | | 6,491 |
| | — |
| | 6,491 |
| | (6,491 | ) | | — |
| | 5,437 |
| | — |
| | 5,437 |
| | (5,437 | ) | | — |
|
Subtotal | | 163,116 |
| | (3,772 | ) | | 159,344 |
| | 12,135 |
| | 171,479 |
| | 147,705 |
| | (1,417 | ) | | 146,288 |
| | 16,974 |
| | 163,262 |
|
| |
| | | | | | | |
| |
| | | | | | | |
|
Interest income | | 18 |
| | | | 18 |
| | — |
| | 18 |
| | 323 |
| | — |
| | 323 |
| | — |
| | 323 |
|
Interest expense | |
| | | |
| |
| |
| |
| | | |
| |
| |
|
Amortization and write-off of market rate adjustments | | 804 |
| | — |
| | 804 |
| | (804 | ) | | — |
| | (8,878 | ) | | — |
| | (8,878 | ) | | 8,878 |
| | — |
|
Amortization and write-off of deferred financing costs | | (4,214 | ) | | — |
| | (4,214 | ) | | 4,214 |
| | — |
| | (4,209 | ) | | — |
| | (4,209 | ) | | 4,209 |
| | — |
|
Debt extinguishment costs | | (7 | ) | | — |
| | (7 | ) | | 7 |
| | — |
| | (259 | ) | | — |
| | (259 | ) | | 259 |
| | — |
|
Interest on debt | | (68,003 | ) | | 1,420 |
| | (66,583 | ) | | — |
| | (66,583 | ) | | (69,563 | ) | | 494 |
| | (69,069 | ) | | — |
| | (69,069 | ) |
Provision for income taxes | | (604 | ) | | — |
| | (604 | ) | | 604 |
| | — |
| | (537 | ) | | — |
| | (537 | ) | | 537 |
| | — |
|
Preferred distributions | | (953 | ) | | | | (953 | ) | | — |
| | (953 | ) | | — |
| | — |
| | — |
| | — |
| | — |
|
Funds from operations | | $ | 90,157 |
| | $ | (2,352 | ) | | $ | 87,805 |
| | $ | 16,156 |
| | $ | 103,961 |
| | $ | 64,582 |
| | $ | (923 | ) | | $ | 63,659 |
| | $ | 30,857 |
| | $ | 94,516 |
|
Funds from operations per share - basic (7) | |
| | | |
| |
| | $ | 1.80 |
| |
| | | |
| |
| | $ | 1.65 |
|
Funds from operations per share - diluted (8) | |
| | | |
| |
| | $ | 1.79 |
| |
| | | |
| |
| | $ | 1.64 |
|
(1) Represents our partner's share of operations from consolidated properties.
(2) Core adjustments includes the aggregate amounts for straight-line rent of $(1,162) and $(1,757), above / below market lease amortization of $6,562 and $13,066 and tenant inducement amortization of $72 and $28 for the years ended December 31, 2015 and 2014, respectively.
(3) Core adjustments include above / below market ground lease amortization of $155 and $145 for the years ended December 31, 2015 and 2014, respectively.
(4) General and administrative costs include $2,899 and $3,699 of non-cash stock compensation expense for the years ended December 31, 2015 and 2014, respectively.
(5) Core adjustments include amounts for the corporate and regional office straight-line rent of $17 and $56 for the years ended December 31, 2015 and 2014, respectively.
(6) Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield's IT platform on to Rouse's IT platform.
(7) Calculated using weighted average number of shares of 57,802,287 and 57,203,196 for the years ended December 31, 2015 and 2014, respectively.
(8) Assumes 58,116,256 and 57,742,725 of diluted common shares for the years ended December 31, 2015 and 2014, respectively.
|
| | |
Q4 2015 Supplemental Package | | 8 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Core NOI Summary
|
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | Years Ended |
(In thousands) | | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) | | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) |
| | | | | | | | |
Consolidated net operating income | | $ | 56,684 |
| | $ | 51,630 |
| | $ | 195,424 |
| | $ | 179,471 |
|
Add / (less) : | |
|
| |
| |
| |
|
Non-controlling interests | | (957 | ) | | (1,047 | ) | | (3,773 | ) | | (1,417 | ) |
Core NOI adjustments | | 636 |
| | 2,709 |
| | 5,627 |
| | 11,481 |
|
Rouse core net operating income | | $ | 56,363 |
| | $ | 53,292 |
| | $ | 197,278 |
| | $ | 189,535 |
|
Add / (less): | |
|
| |
| |
| |
|
Non same property assets (1) | | (12,970 | ) | | (11,710 | ) | | (43,642 | ) | | (39,301 | ) |
Lease termination income and other | | (1,042 | ) | | (847 | ) | | (1,818 | ) | | (2,204 | ) |
Same Property core net operating income (2) | | $ | 42,351 |
| | $ | 40,735 |
| | $ | 151,818 |
| | $ | 148,030 |
|
Same Property change % | | 4.0 | % | |
| | 2.6 | % | |
|
(1) Represents Bel Air Mall, The Mall at Barnes Crossing, Mt. Shasta, Fig Garden, and The Shoppes at Carlsbad, which were acquired in May 2014, August 2014, January 2015, June 2015, and November 2015, respectively, and The Shoppes at Knollwood Mall, Steeplegate Mall, and Collin Creek Mall, which were disposed of in January 2015, March 2015 and April 2015, respectively. Same Property portfolio also excludes Gateway Mall, NewPark Mall and Spring Hill Mall, which are undergoing redevelopment with significant disruption. Vista Ridge Mall is a special consideration asset, which is also excluded from our Same Property portfolio. An asset is designated as a special consideration asset when a property has a heightened probability of being conveyed to its lender absent substantive renegotiation.
(2) Same Property Core net operating income,includes legacy litigation expenses (recoveries) for the three months ended December 31, 2015 and 2014 of $0.01 million and $(0.02) million, respectively. Same Property Core net operating income,includes legacy litigation expenses for the years ended December 31, 2015 and 2014 of $0.05 million and $0.8 million, respectively.
|
| | |
Q4 2015 Supplemental Package | | 9 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Reconciliation of Non-GAAP to GAAP Financial Measures
|
| | | | | | | | | | | | | | | |
| Three Months Ended | | Years Ended |
(In thousands) | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) | | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) |
| | | | |
| |
|
Reconciliation of NOI to GAAP Operating Income | | | | |
| |
|
Rouse NOI | $ | 55,727 |
| | $ | 50,583 |
| | $ | 191,651 |
| | $ | 178,054 |
|
Non-controlling interests | 957 |
| | 1,047 |
| | 3,773 |
| | 1,417 |
|
General and administrative | (6,132 | ) | | (7,716 | ) | | (25,817 | ) | | (26,329 | ) |
Other | (1,286 | ) | | (2,805 | ) | | (6,491 | ) | | (5,437 | ) |
Depreciation and amortization | (35,221 | ) | | (28,708 | ) | | (107,941 | ) | | (100,302 | ) |
Provision for impairment | — |
| | (5,300 | ) | | (2,900 | ) | | (15,965 | ) |
Operating income | $ | 14,045 |
| | $ | 7,101 |
| | $ | 52,275 |
| | $ | 31,438 |
|
| | | | |
| |
|
Reconciliation of FFO to GAAP Net income (loss) allocable to common shareholders | | | | |
| |
|
FFO | $ | 30,924 |
| | $ | 20,666 |
| | $ | 87,805 |
| | $ | 63,659 |
|
Non-controlling interests - Depreciation and amortization/Other | 587 |
| | 753 |
| | 2,428 |
| | 852 |
|
Depreciation and amortization | (35,221 | ) | | (28,708 | ) | | (107,941 | ) | | (100,302 | ) |
Provision for impairment | — |
| | (5,300 | ) | | (2,900 | ) | | (15,965 | ) |
Gain (loss) on extinguishment of debt | (270 | ) | | — |
| | 26,558 |
| | — |
|
Gain on sale of real estate assets | 2,300 |
| | — |
| | 34,796 |
| | — |
|
Net income (loss) allocable to common shareholders | $ | (1,680 | ) | | $ | (12,589 | ) | | $ | 40,746 |
| | $ | (51,756 | ) |
| | | | |
| |
|
Weighted average number of shares outstanding - Basic | 57,939,535 |
| | 57,531,859 |
| | 57,802,287 |
| | 57,203,196 |
|
| | | | | | | |
Weighted average number of shares outstanding - Diluted | 57,939,535 |
| | 57,531,859 |
| | 58,116,256 |
| | 57,203,196 |
|
| | | | | | | |
Per common share data: | | | | | | | |
Net income (loss) per share allocable to common shareholders | | | | | | | |
Basic | $ | (0.03 | ) | | $ | (0.22 | ) | | $ | 0.70 |
| | $ | (0.90 | ) |
| | | | | | | |
Diluted | $ | (0.03 | ) | | $ | (0.22 | ) | | $ | 0.70 |
| | $ | (0.90 | ) |
|
| | |
Q4 2015 Supplemental Package | | 10 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Mortgages, Notes, and Loans Payable
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(In thousands) | Ownership | Maturity | | | | Outstanding Balance | | Balloon Payment at Maturity | | | |
| % | Month | Year | | Rate | | | 2016 | 2017 | 2018 | 2019 | 2020 | After | Mortgage Details |
Vista Ridge Mall (1) | 100% | Apr | 2016 |
| 6.87 |
| | 65,611 |
| | 64,660 |
| | 951 |
| — |
| — |
| — |
| — |
| — |
| Non-recourse / fixed |
The Centre at Salisbury (1) (2) | 100% | May | 2016 |
| 5.79 |
| | 115,000 |
| | 115,000 |
| | — |
| — |
| — |
| — |
| — |
| — |
| Partial recourse / fixed (2) |
The Mall at Turtle Creek | 100% | Jun | 2016 |
| 6.54 |
| | 76,615 |
| | 76,079 |
| | 536 |
| — |
| — |
| — |
| — |
| — |
| Non-recourse / fixed |
NewPark Mall (3) | 100% | Sep | 2018 |
| 2.53 |
| | 114,245 |
| | 114,245 |
| | — |
| — |
| — |
| — |
| — |
| — |
| Non-recourse / floating |
West Valley Mall (1) (4) | 100% | Sep | 2018 |
| 3.24 |
| | 59,000 |
| | 56,790 |
| | 188 |
| 1,147 |
| 875 |
| — |
| — |
| — |
| Non-recourse / fixed |
The Shoppes at Bel Air (1) (5) | 100% | Nov | 2018 | | 2.78 |
| | 110,450 |
| | 108,800 |
| | — |
| 275 |
| 1,375 |
| — |
| — |
| — |
| Non-recourse / floating |
The Shoppes at Gateway (6) | 100% | Jan | 2020 | | 3.64 |
| | 75,000 |
| | 75,000 |
| | — |
| — |
| — |
| — |
| — |
| — |
| Non-recourse/fixed |
Pierre Bossier Mall | 100% | May | 2022 |
| 4.94 |
| | 45,875 |
| | 39,891 |
| | 818 |
| 866 |
| 911 |
| 957 |
| 1,000 |
| 1,432 |
| Non-recourse / fixed |
Pierre Bossier Anchor | 100% | May | 2022 |
| 4.85 |
| | 3,550 |
| | 2,894 |
| | 90 |
| 95 |
| 100 |
| 105 |
| 110 |
| 156 |
| Non-recourse / fixed |
Southland Center (MI) | 100% | Jul | 2022 |
| 5.09 |
| | 74,806 |
| | 65,085 |
| | 1,284 |
| 1,363 |
| 1,435 |
| 1,511 |
| 1,580 |
| 2,548 |
| Non-recourse / fixed |
Chesterfield Towne Center | 100% | Oct | 2022 |
| 4.75 |
| | 106,379 |
| | 92,380 |
| | 1,789 |
| 1,892 |
| 1,985 |
| 2,082 |
| 2,171 |
| 4,080 |
| Non-recourse / fixed |
Animas Valley Mall | 100% | Nov | 2022 |
| 4.41 |
| | 49,156 |
| | 41,844 |
| | 931 |
| 980 |
| 1,025 |
| 1,072 |
| 1,115 |
| 2,189 |
| Non-recourse / fixed |
Lakeland Square | 100% | Apr | 2023 |
| 4.17 |
| | 66,814 |
| | 55,951 |
| | 1,285 |
| 1,348 |
| 1,406 |
| 1,467 |
| 1,523 |
| 3,834 |
| Non-recourse / fixed |
Valley Hills Mall | 100% | July | 2023 |
| 4.47 |
| | 65,362 |
| | 54,921 |
| | 1,174 |
| 1,237 |
| 1,294 |
| 1,354 |
| 1,409 |
| 3,973 |
| Non-recourse / fixed |
Chula Vista Center | 100% | July | 2024 |
| 4.18 |
| | 70,000 |
| | 60,814 |
| | — |
| 467 |
| 1,175 |
| 1,225 |
| 1,270 |
| 5,049 |
| Non-recourse / fixed |
The Mall at Barnes Crossing | 52.8% | Sep | 2024 |
| 4.29 |
| | 67,000 |
| | 58,361 |
| | — |
| 268 |
| 1,093 |
| 1,142 |
| 1,184 |
| 4,952 |
| Non-recourse / fixed |
Bayshore Mall | 100% | Oct | 2024 | | 3.96 |
| | 46,500 |
| | 40,185 |
| | — |
| 130 |
| 804 |
| 837 |
| 866 |
| 3,678 |
| Non-recourse/ fixed |
Mt. Shasta Mall | 100% | Mar | 2025 | | 4.19 | | 31,850 |
| | 27,747 |
| | — |
| — |
| 386 |
| 540 |
| 560 |
| 2,617 |
| Non-recourse/fixed |
Fig Garden Village | 100%
| Jun | 2025 | | 4.14 |
| | 74,200 |
| | 67,494 |
| | — |
| — |
| — |
| — |
| 606 |
| 6,100 |
| Non-recourse/fixed |
Greenville Mall | 100% | Nov | 2025 |
| 4.46 | | 45,440 |
| | 36,826 |
| | 708 |
| 746 |
| 781 |
| 817 |
| 849 |
| 4,713 |
| Non-recourse / fixed |
| | | | | | | | | | | | | | | | | |
Total property level debt | | | | | 4.40 |
| | $ | 1,362,853 |
| | $ | 1,254,967 |
| | $ | 9,754 |
| $ | 10,814 |
| $ | 14,645 |
| $ | 13,109 |
| $ | 14,243 |
| $ | 45,321 |
| |
| | | | | | | | | | | | | | | | | |
2013 Term Loan (7) (8) | | Nov | 2018 |
| 2.77 |
| | 285,000 |
| | 285,000 |
| | — |
| — |
| — |
| — |
| — |
| — |
| Recourse / floating |
2013 Revolver (7) (8) (9) | | Nov | 2017 |
| 2.76 |
| | 59,000 |
| | 59,000 |
| | — |
| — |
| — |
| — |
| — |
| — |
| Recourse / floating |
| | | | | | | | | | | | | | | | | |
Total corporate level debt (10) (11) | | | | | | | 344,000 |
| | 344,000 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| |
Total Debt Outstanding | | | | | 4.07 | % | | $ | 1,706,853 |
| | $ | 1,598,967 |
| | $ | 9,754 |
| $ | 10,814 |
| $ | 14,645 |
| $ | 13,109 |
| $ | 14,243 |
| $ | 45,321 |
| |
| | | | | | | | | | | | | | | | | |
Market rate adjustment | | | | | | | (340 | ) | | | | | | | | | | |
Total Debt Outstanding | | | | | | | $ | 1,706,513 |
| | | | | | | | | | |
Less: Non controlling interest share of debt | | | | |
|
|
|
| | | | | | | | | | |
The Mall at Barnes Crossing | 47.2% | Sep | 2024 | | 4.29 |
|
| (31,624 | ) | | | | | | | | | | |
Company's Share of Consolidated Debt | | | | | 4.40 | % |
| $ | 1,674,889 |
| | | | | | | | | | |
|
| | |
Q4 2015 Supplemental Package | | 11 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Mortgages, Notes, and Loans Payable
(1) Prepayable without a penalty.
(2) The Company guaranteed a maximum amount of $3.5 million until certain financial covenants are met for two consecutive years.
(3) An interest rate swap became effective on this loan beginning January 1, 2016, which fixes the interest rate at 3.26%, through September 2018.
(4) During January 2014, the Company entered into a swap transaction which fixes the interest rate on the loan for this property at 3.24%, through June 2018.
(5)The loan provides for an additional subsequent funding of $9.5 million upon achieving certain conditions. The Company entered into a interest rate swap on this loan beginning in January 2016, which fixes the interest rate at 3.34% through November 2018.
(6)The mortgage loan has a one year extension option. We entered into an interest swap on the loan which fixes the interest rate at 3.64% through January 2020. In connection, with the removal of The Shoppes at Gateway from the 2013 Senior Facility collateral pool, The Shoppes at Carlsbad was added to the 2013 Senior Facility collateral pool with no change to the outstanding 2013 Senior Facility balance.
(7) LIBOR (30 day) plus 233 basis points.
(8) During the year ended December 31, 2015, the Company exercised an "accordion" feature and increased the aggregate commitments under the 2013 Senior Facility from $545.0 million to $595.0 million, increased availability of borrowings on a revolving basis from $285.0 million to $310.0 million and increased the 2013 Term Loan from $260.0 million to $285.0 million.
(9)As of December 31, 2015, the Company had $59.0 million of indebtedness outstanding under the 2013 Revolver.
(10) The following properties were allocated to our 2013 Senior Facility collateral pool as of December 31, 2015:
|
| | | |
Birchwood Mall | Lansing Mall | The Shoppes at Carlsbad | Southland Mall |
Cache Valley Mall | The Mall at Sierra Vista | Sikes Senter | Three Rivers Mall |
Colony Square Mall | Mall St. Vincent | Silver Lake Mall | Westwood Mall |
Grand Traverse Mall | North Plains Mall | Spring Hill Mall | White Mountain Mall |
(11) Approximately 67% or $1.14 billion of the Rouse debt had a fixed interest rate and 33% or $569.0 million of the Rouse debt had a variable interest rate.
|
| | | | | | | | | | | | | | | | | | | | | |
(In thousands) | 2016 | 2017 | 2018 | 2019 | 2020 | After | Total |
Balloon payment | $ | 255,739 |
| $ | 59,000 |
| $ | 564,835 |
| $ | — |
| $ | 75,000 |
| $ | 644,393 |
| $ | 1,598,967 |
|
Amortization | 9,754 |
| 10,814 |
| 14,645 |
| 13,109 |
| 14,243 |
| 45,321 |
| 107,886 |
|
Debt maturity and amortization | $ | 265,493 |
| $ | 69,814 |
| $ | 579,480 |
| $ | 13,109 |
| $ | 89,243 |
| $ | 689,714 |
| $ | 1,706,853 |
|
Weighted average interest rate of expiring debt | 6.29 | % | 2.76 | % | 2.77 | % | — | % | 3.64 | % | 4.45 | % | 4.07 | % |
|
| | |
Q4 2015 Supplemental Package | | 12 |
|
| | | | | | | | | | | | | | | | |
(In thousands) | | Property-Level Debt | | Term Loan | | Revolver | | Total |
Beginning balance as of January 1, 2015 | | $ | 1,313,730 |
| | $ | 260,000 |
| | $ | 10,000 |
| | $ | 1,583,730 |
|
Mt. Shasta Acquisition Financing | | 31,850 |
| | — |
| | — |
| | 31,850 |
|
Washington Park Payoff | | (10,474 | ) | | — |
| | — |
| | (10,474 | ) |
Steeplegate Disposition | | (45,862 | ) | | — |
| | — |
| | (45,862 | ) |
Collin Creek Disposition | | (57,572 | ) | | — |
| | — |
| | (57,572 | ) |
Fig Garden Village Acquisition Financing | | 74,200 |
| | — |
| | — |
| | 74,200 |
|
Grand Traverse Payoff | | (58,982 | ) | | — |
| | — |
| | (58,982 | ) |
NewPark Mall Payoff | | (64,665 | ) | | — |
| | — |
| | (64,665 | ) |
NewPark Mall Refinance | | 114,250 |
| | — |
| | — |
| | 114,250 |
|
Bel Air Mall Payoff | | (109,618 | ) | | — |
| | — |
| | (109,618 | ) |
Bel Air Mall Refinance | | 110,450 |
| | — |
| | — |
| | 110,450 |
|
Greenville Mall Payoff | | (40,171 | ) | | — |
| | — |
| | (40,171 | ) |
Greenville Mall Refinance | | 45,500 |
| | — |
| | — |
| | 45,500 |
|
Gateway Mall Refinance | | 75,000 |
| | — |
| | — |
| | 75,000 |
|
2015 Mortgage Loan Amortization | | (14,783 | ) | | — |
| | — |
| | (14,783 | ) |
Accordion Exercise | | — |
| | 25,000 |
| | — |
| | 25,000 |
|
Drawdowns on 2013 Revolver | | — |
| | — |
| | 276,500 |
| | 276,500 |
|
Paydowns on 2013 Revolver | | — |
| | — |
| | (227,500 | ) | | (227,500 | ) |
Ending balance as of December 31, 2015 | | $ | 1,362,853 |
| | $ | 285,000 |
| | $ | 59,000 |
| | $ | 1,706,853 |
|
| | | | | | | | |
Weighted Average Balance | | $ | 1,282,241 |
| | $ | 272,671 |
| | $ | 55,248 |
| | $ | 1,610,160 |
|
|
| | |
Q4 2015 Supplemental Package | | 13 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Prepaid Expenses and Other Assets, Net
|
| | | | | | | |
(In thousands) | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) |
| | | |
Above-market tenant leases, net | $ | 40,180 |
| | $ | 50,996 |
|
Prepaid expenses | 4,372 |
| | 4,755 |
|
Below-market ground leases, net | 2,990 |
| | 3,145 |
|
Deposits | 424 |
| | 1,447 |
|
Other | 1,068 |
| | 2,347 |
|
Total prepaid expenses and other assets, net | $ | 49,034 |
| | $ | 62,690 |
|
Accounts Payable and Accrued Expenses, Net
|
| | | | | | | |
(In thousands) | December 31, 2015 (Unaudited) | | December 31, 2014 (Unaudited) |
| | | |
Construction payable | $ | 47,572 |
| | $ | 16,272 |
|
Below-market tenant leases, net | 42,592 |
| | 43,292 |
|
Accrued dividend | 10,472 |
| | 9,885 |
|
Accrued real estate taxes | 8,773 |
| | 9,028 |
|
Accounts payable and accrued expenses | 8,096 |
| | 9,901 |
|
Accrued payroll and other employee liabilities | 7,778 |
| | 9,352 |
|
Accrued interest | 6,868 |
| | 4,380 |
|
Deferred income | 5,420 |
| | 5,471 |
|
Asset retirement obligation liability | 4,585 |
| | 4,545 |
|
Tenant and other deposits | 1,706 |
| | 1,336 |
|
Other | 3,426 |
| | 514 |
|
Total accounts payable and accrued expenses, net | $ | 147,288 |
| | $ | 113,976 |
|
|
| | |
Q4 2015 Supplemental Package | | 14 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Strategic Capital Redevelopment Projects:
($ In thousands)
|
| | | | | | | | | | | | | | |
Property | | Description | | Total Project Square Feet | | Total Estimated Project Cost | | Cost to Date | | Estimated Stabilized Yield (1) | | Construction Start Date | | Substantial Completion Date |
NewPark Mall Newark, CA | | 140,000 SF of new entertainment, including AMC Theater and a two level restaurant pavilion with patio seating. | | 175,000 | | $64,232 (2) | | $59,819 | | 9.5 - 10.5% | | Q3 2014 | | Q4 2015 - Q2 2016 |
Gateway Mall Springfield, OR | | De-mall and construct new exterior facing junior boxes including Marshall's, Hobby Lobby, Petco and new outparcels. | | 288,000 | | $45,200 | | $37,220 | | 8 - 9% | | Q3 2014 | | Q4 2015 |
Southland Center Taylor, MI | | Demolish vacant anchor and construct new 50,000 SF Cinemark Theater and restaurant collection. | | 62,000 | | $15,300 | | $2,096 | | 9 - 10% | | Q2 2015 | | Q1 2016 |
Southland Mall Hayward, CA | | Redevelop former Kohl's anchor for new Dick's Sporting Goods, convert inline space to new Cinemark Theater, junior boxes and full service and fast casual restaurants. | | 243,000 | | $44,400 | | $5,505 | | 9 - 10% | | Q3 2015 | | Q4 2016 - Q2 2017 |
Spring Hill Mall West Dundee, IL | | Replace former JCPenney anchor and inline space with new 37,000 SF Cinemark Theater, street scape, multi-tenant buildings and restaurant collection. | | 93,000 | | $23,216 (3) | | $14,024 | | 8 - 9% | | Q3 2015 | | Q4 2016 |
(1) Estimated stabilized yield based on total net estimated project cost.
(2) After deducting the benefit of the net present value of municipal incentive currently estimated at $9.6 million.
(3) After deducting the benefit of the net present value of municipal incentive currently estimated at $6.5 million.
Operating Property Capital Expenditures:
|
| | | | |
| | Year Ended |
(In thousands) | | December 31, 2015 |
Ordinary capital expenditures (1) | | $ | 1,493 |
|
Cosmetic capital expenditures | | 12,739 |
|
Tenant improvements and allowances (2) | | 29,442 |
|
Total | | $ | 43,674 |
|
(1) Includes non-tenant recurring and non-recurring capital expenditures.
(2) Includes tenant improvements and allowances on current operating properties, excluding anchors and strategic projects.
|
| | |
Q4 2015 Supplemental Package | | 15 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Key Operating Performance Indicators
As of December 31, 2015
|
| | | | | | | | | | | | |
GLA Summary (1) |
(In thousands) | | Number of Properties | | Mall and Freestanding GLA | | Anchor GLA (Rouse Owned) | | Office GLA | | Anchor GLA (Tenant Owned) | | Total Area |
Total Rouse Properties Portfolio | | 36 | | 11,834 | | 5,721 | | 34 | | 7,300 | | 24,889 |
| | | | | | | | | | | | |
|
| | | | |
Operating Metrics (1) |
| | Tenant Sales (2) | | Occupancy Costs (3) |
Total Operating Portfolio | | $350 | | 11.0% |
|
| | | |
| Operating Portfolio |
| In-Place Rent < 10k SF (4) |
| December 31, 2015 | | December 31, 2014 |
Freestanding | $20.88 | | $20.06 |
Mall | 41.76 | | 39.41 |
Total Operating Portfolio | $39.11 | | $37.14 |
(1) See Property Schedule on page 17 for individual details.
(2) Trailing twelve month tenant sales for mall and freestanding stores less than 10,000 square feet for those tenants reporting.
(3) Represents mall and freestanding tenants less than 10,000 square feet utilizing comparative tenant sales.
(4) Weighted average rent of mall and freestanding stores as of December 31, 2015 and 2014. Rent is presented on a cash basis and consists of base minimum rent,
common area costs, and real estate taxes.
|
| | |
Q4 2015 Supplemental Package | | 16 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Summary of Properties (1)
As of December 31, 2015 |
| | | | | | | | | | | | | | | | |
Property Name | Location | Anchors / Major Tenants | Mall and Freestanding GLA | Office GLA | Anchor GLA (Rouse Owned) | Anchor GLA (Tenant Owned) | Total GLA | % Leased | % Occupied |
Animas Valley Mall | Farmington, NM | Dillard's, JCPenney, Sears | 277,983 |
| — |
| 188,817 |
| — |
| 466,800 |
| 90.9 | % | 90.9 | % |
Barnes Crossing, The Mall at | Tupelo, MS | Belk, Belk Home, JCPenney, Sears | 378,231 |
| — |
| 250,965 |
| 100,954 |
| 730,150 |
| 96.9 |
| 94.6 |
|
Bayshore Mall | Eureka, CA | Wal Mart, Kohl's, Sears | 365,510 |
| — |
| 161,209 |
| 59,235 |
| 585,954 |
| 86.5 |
| 85.4 |
|
Bel Air Mall | Mobile, AL | Belk, Dillard's, Target, JCPenney | 393,947 |
| — |
| 325,148 |
| 440,865 |
| 1,159,960 |
| 93.6 |
| 87.8 |
|
Birchwood Mall | Port Huron, MI | Target, Macy's, JCPenney, Carson's, Sears | 302,880 |
| — |
| 161,216 |
| 264,918 |
| 729,014 |
| 91.7 |
| 91.7 |
|
Cache Valley Mall | Logan, UT | Herberger's, JCPenney | 236,685 |
| — |
| 109,476 |
| — |
| 346,161 |
| 94.0 |
| 92.1 |
|
Chesterfield Towne Center | Richmond, VA | Macy's, JCPenney, At Home, Sears | 484,931 |
| — |
| 543,572 |
| — |
| 1,028,503 |
| 92.7 |
| 92.2 |
|
Chula Vista Center | Chula Vista, CA | Macy's, AMC, JCPenney, Burlington, Sears | 321,788 |
| — |
| 163,232 |
| 377,600 |
| 862,620 |
| 92.3 |
| 92.1 |
|
Colony Square Mall | Zanesville, OH | Elder-Beerman, JCPenney, Dunham's Sports, Cinemark | 359,517 |
| — |
| 78,440 |
| 58,997 |
| 496,954 |
| 77.7 |
| 76.7 |
|
Fig Garden Village | Fresno, CA | Whole Foods, CVS | 267,740 |
| 33,181 |
| — |
| — |
| 300,921 |
| 93.8 |
| 93.8 |
|
Grand Traverse Mall | Traverse City, MI | Macy's, Target, JCPenney | 316,000 |
| — |
| — |
| 283,349 |
| 599,349 |
| 92.6 |
| 87.4 |
|
Greenville Mall | Greenville, NC | Belk, Belk Ladies, JCPenney, Dunham's Sports | 225,103 |
| — |
| 178,510 |
| 46,051 |
| 449,664 |
| 94.1 |
| 94.1 |
|
Lakeland Square | Lakeland, FL | Dillard's, Macy's, JCPenney, Cinemark, Sears | 351,171 |
| — |
| 276,358 |
| 257,353 |
| 884,882 |
| 96.6 |
| 91.9 |
|
Lansing Mall | Lansing, MI | Macy's, Regal Cinema, JCPenney, Younkers | 477,986 |
| — |
| 210,900 |
| 103,000 |
| 791,886 |
| 93.7 |
| 93.7 |
|
Mall St. Vincent | Shreveport, LA | Dillard's, Sears | 194,152 |
| — |
| — |
| 348,000 |
| 542,152 |
| 87.7 |
| 83.5 |
|
Mt. Shasta Mall | Redding, CA | Macy's, JCPenney, Sears | 188,558 |
| — |
| 130,444 |
| 202,594 |
| 521,596 |
| 99.1 |
| 86.2 |
|
North Plains Mall | Clovis, NM | Dillard's, JCPenney, Sears, Beall's | 131,234 |
| — |
| 170,496 |
| — |
| 301,730 |
| 94.4 |
| 94.4 |
|
Pierre Bossier Mall | Bossier City, LA | Dillard's, JCPenney, Sears, Virginia College | 265,365 |
| — |
| 59,156 |
| 288,328 |
| 612,849 |
| 84.6 |
| 84.6 |
|
Salisbury, The Centre at | Salisbury, MD | Macy's, Dick's, Regal Cinema, Boscov's, Sears | 368,758 |
| — |
| 272,304 |
| 140,000 |
| 781,062 |
| 96.5 |
| 94.6 |
|
Sierra Vista, The Mall at | Sierra Vista, AZ | Dillard's, Cinemark, Sears | 170,185 |
| — |
| — |
| 196,492 |
| 366,677 |
| 95.1 |
| 95.1 |
|
Sikes Senter | Wichita Falls, TX | Dillard's, Dillard's Men's and Home, JCPenney, At Home | 293,031 |
| — |
| 374,690 |
| — |
| 667,721 |
| 88.2 |
| 85.8 |
|
Silver Lake Mall | Coeur D' Alene, ID | Macy's, JCPenney, Sears, Sports Authority | 153,220 |
| — |
| 172,253 |
| — |
| 325,473 |
| 85.1 |
| 85.1 |
|
Southland Center | Taylor, MI | Macy's, Cinemark, JCPenney | 371,567 |
| — |
| 215,787 |
| 292,377 |
| 879,731 |
| 97.0 |
| 96.1 |
|
Southland Mall | Hayward, CA | Macy's, JCPenney, Sears | 573,637 |
| — |
| 347,032 |
| 292,000 |
| 1,212,669 |
| 93.8 |
| 92.6 |
|
Three Rivers Mall | Kelso, WA | JCPenney, Macy's, Sportsman's Warehouse, Regal Cinema | 307,563 |
| — |
| 98,566 |
| — |
| 406,129 |
| 82.6 |
| 82.6 |
|
Turtle Creek, The Mall at | Jonesboro, AR | Dillard's, Target, JCPenney | 366,993 |
| — |
| — |
| 364,199 |
| 731,192 |
| 95.1 |
| 91.2 |
|
Valley Hills Mall | Hickory, NC | Belk, Dillard's, JCPenney, Sears | 316,741 |
| — |
| — |
| 611,516 |
| 928,257 |
| 88.5 |
| 91.1 |
|
Washington Park Mall | Bartlesville, OK | JCPenney, Dillard's, Sears | 161,864 |
| — |
| 122,894 |
| 71,402 |
| 356,160 |
| 91.3 |
| 91.3 |
|
West Valley Mall | Tracy, CA | Macy's, Target, Cinemark, JCPenney, Sears | 535,463 |
| — |
| 236,454 |
| 111,836 |
| 883,753 |
| 96.2 |
| 95.8 |
|
Westwood Mall | Jackson, MI | Wal-Mart, JCPenney, Younkers | 143,943 |
| — |
| 70,500 |
| 301,188 |
| 515,631 |
| 87.3 |
| 87.3 |
|
White Mountain Mall | Rock Springs, WY | Herberger's, JCPenney | 243,040 |
| — |
| 94,482 |
| — |
| 337,522 |
| 91.8 |
| 91.8 |
|
Total Operating Portfolio | | | 9,544,786 |
| 33,181 |
| 5,012,901 |
| 5,212,254 |
| 19,803,122 |
| 92.0 | % | 90.4 | % |
Carlsbad, The Shoppes at | Carlsbad, CA | Macy's, JCPenney, Regal Cinema, 24 Hour Fitness, Sears | 518,163 |
| — |
| 148,958 |
| 421,093 |
| 1,088,214 |
| 85.1 |
| 83.9 |
|
Gateway Mall | Springfield, OR | Kohl's, Sears, Target, Cabella's, Walmart Neighborhood Grocery, Cinemark | 478,789 |
| — |
| 218,055 |
| 113,613 |
| 810,457 |
| 95.4 |
| 88.5 |
|
NewPark Mall | Newark, CA | Macy's, JCPenney, AMC, Burlington Coat, Sears | 485,414 |
| — |
| 207,372 |
| 335,870 |
| 1,028,656 |
| 84.6 |
| 70.7 |
|
Spring Hill Mall | West Dundee, IL | Kohl's, Carson Pirie Scott, Macy's, Sears | 417,076 |
| — |
| 134,148 |
| 547,432 |
| 1,098,656 |
| 83.4 |
| 72.1 |
|
Vista Ridge Mall | Lewisville, TX | Dillard's, JCPenney, Macy's, Cinemark, Sears | 390,078 |
| — |
| — |
| 670,210 |
| 1,060,288 |
| 83.2 |
| 83.2 |
|
Redevelopment and special consideration assets | 2,289,520 |
| — |
| 708,533 |
| 2,088,218 |
| 5,086,271 |
| 86.5 | % | 80.1 | % |
Total Rouse Portfolio |
| | 11,834,306 |
| 33,181 |
| 5,721,434 |
| 7,300,472 |
| 24,889,393 |
| 90.9 | % | 88.5 | % |
(1) All properties are 100% owned by Rouse Properties Inc., and subsidiaries with the exception of The Mall at Barnes Crossing of which Rouse owns a 52.8% controlling interest.
|
| | |
Q4 2015 Supplemental Package | | 17 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Lease Expiration Schedule (1)
As of December 31, 2015
|
| | | | | | | | | | | | |
Year | | Number of Expiring Leases | | Expiring GLA | | Expiring Rates ($ psf) (2) | | Percent of Total Gross Rent |
Specialty Leasing (3) | | 501 | | 1,181,385 |
| | $ | 13.70 |
| | |
Permanent Leasing | | | | | | | | |
2015 and prior | | 19 | | 46,578 |
| | 66.12 |
| | 1.05 | % |
2016 | | 392 | | 1,128,717 |
| | 34.16 |
| | 13.15 | % |
2017 | | 395 | | 1,242,949 |
| | 33.84 |
| | 14.34 | % |
2018 | | 246 | | 1,024,926 |
| | 35.69 |
| | 12.47 | % |
2019 | | 152 | | 716,891 |
| | 32.84 |
| | 8.03 | % |
2020 | | 146 | | 621,549 |
| | 29.32 |
| | 6.21 | % |
2021 | | 104 | | 693,121 |
| | 24.93 |
| | 5.87 | % |
2022 | | 92 | | 481,824 |
| | 28.86 |
| | 4.74 | % |
2023 | | 87 | | 438,017 |
| | 33.25 |
| | 4.97 | % |
2024 | | 93 | | 663,038 |
| | 23.06 |
| | 5.21 | % |
2025 | | 119 | | 853,020 |
| | 28.27 |
| | 8.22 | % |
2026 | | 82 | | 624,115 |
| | 28.40 |
| | 6.04 | % |
2027 and thereafter | | 47 | | 1,040,232 |
| | 27.24 |
| | 9.70 | % |
Total Permanent Leasing | | 1,974 | | 9,574,977 |
| | $ | 30.65 |
| | 100.00 | % |
Total Leasing | | 2,475 | | 10,756,362 |
| | | | |
(1) Represents contractual obligations for space in regional malls and excludes traditional anchor stores.
(2) Excluded from the Expiring Rates are freestanding spaces, kiosks and leases paying percent rent in lieu of base minimum rent.
(3) Includes Specialty Leasing license agreements with terms in excess of 12 months.
|
| | |
Q4 2015 Supplemental Package | | 18 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Top Ten Tenants
As of December 31, 2015
|
| | | | | | | | | | |
| | | | | | | | Locations |
Retail Portfolio | | Primary DBA | | Percent of Minimum Rent, Tenant Recoveries and Other (1) | | Square Footage (000's) | | Total | | Rouse Owned |
L Brands, Inc. | | Bath & Body Works, Victoria's Secret, White Barn Candle Co. | | 4.3% | | 276 | | 65 | | 65 |
Foot Locker, Inc. | | Champs Sports, Footaction USA,Foot Locker, Kids Foot Locker, Lady Foot Locker | | 3.5 | | 228 | | 55 | | 55 |
Signet Jewelers Limited | | Belden Jewelers, JB Robinson Jewelers, Kay Jewelers, Osterman Jewelers, Weisfields Jewelers, Zales, Gordon's ,Piercing Pagoda | | 3.3 | | 91 | | 70 | | 70 |
JCPenney Company, Inc. | | JCPenney | | 2.6 | | 2,798 | | 29 | | 18(2) |
Cinemark USA, Inc. | | Cinemark, Movies | | 2.1 | | 356 | | 8 | | 8 |
Sears Holdings Corporation | | Sears | | 2.0 | | 3,073 | | 24 | | 12 |
American Eagle Outfitters, Inc. | | Aerie, American Eagle Outfitters | | 1.7 | | 110 | | 19 | | 19 |
Genesco Inc. | | Hat Shack, Hat World, Journey's, Lids, Lids Locker Room, Underground Station | | 1.7 | | 86 | | 59 | | 59 |
Ascena Retail Group, Inc. | | Ann Taylor, Loft, Dressbarn, Justice, Limited Too, Maurices, Lane Bryant | | 1.7 | | 214 | | 43 | | 43 |
Macy's, Inc. | | Macy's | | 1.7 | | 2,360 | | 18 | | 5 |
Totals | | | | 24.6% | | 9,592 | | 390 | | 354 |
(1) Represents the trailing twelve months of minimum rent, tenant recoveries and other.
(2) Does not include three locations in which Rouse owns the land which is ground leased to JCPenney.
|
| | |
Q4 2015 Supplemental Package | | 19 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
Leasing Activity
As of December 31, 2015
|
| | | | | | | | | | | |
| TOTAL LEASING ACTIVITY (1) |
New Leases | Number of Leases | Square Feet | Term | | Initial Inline Rent PSF (2) | | Initial Freestanding Rent PSF | | Average Inline Rent PSF | | Average Freestanding Rent PSF |
Under 10,000 sq. ft. | 40 | 145,403 | 9.8 | | $35.12 | | $40.81 | | $43.08 | | $43.43 |
Over 10,000 sq. ft. | 2 | 84,604 | 10.5 | | 15.24 | | — | | 16.09 | | — |
Total New Leases | 42 | 230,007 | 10.1 | | 27.52 | | 40.81 | | 32.76 | | 43.43 |
| | | | | | | | | | | |
Renewal Leases | | | | | | | | | | | |
Under 10,000 sq. ft. | 73 | 211,027 | 2.9 | | $30.28 | | $16.47 | | $31.34 | | $16.47 |
Over 10,000 sq. ft. | 4 | 122,625 | 6.4 | | 9.29 | | — | | 9.52 | | — |
Total Renewal Leases | 77 | 333,652 | 4.2 | | 22.43 | | 16.47 | | 23.18 | | 16.47 |
| | | | | | | | | | | |
Sub-Total | 119 | 563,659 | 6.6 | | 24.48 | | 31.25 | | 27.04 | | 32.84 |
| | | | | | | | | | | |
Percent in Lieu | 27 | 84,228 | n.a | | n.a | | n.a | | n.a | | n.a |
| | | | | | | | | | | |
Total Q4 2015 | 146 | 647,887 | 6.6 | | $24.48 | | $31.25 | | $27.04 | | $32.84 |
Total Q3 2015 | 103 | 531,892 | | | | | | | | | |
Total Q2 2015 | 100 | 605,817 | | | | | | | | | |
Total Q1 2015 | 115 | 456,779 | | | | | | | | | |
Total 2015 | 464 | 2,242,375 | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | |
| SUITE TO SUITE - NEW & RENEWAL LEASE SPREAD (4) |
| | | | | | | | | Initial Rent Spread | | Average Rent Spread |
| Number of Leases | Square Feet | Term | Initial Rent PSF (2) | Average Rent PSF (3) | | Expiring Rent PSF (5) | | $ | % | | $ | % |
Total Q4 2015 | 69 | 240,453 |
| 5.2 | $ | 30.06 |
| $ | 32.19 |
| | $ | 26.16 |
| | $3.90 | 14.9% | | $6.03 | 23.1% |
| | | | | | | | | | | | | |
Total YTD 2015 | 250 | 1,037,945 |
| 4.5 | $ | 27.15 |
| $ | 28.75 |
| | $ | 24.18 |
| | $2.96 | 12.3% | | $4.57 | 18.9% |
(1) Excluding anchors and specialty leasing.
(2) Represents initial rent at time of rent commencement consisting of base minimum rent, common area costs, and real estate taxes.
(3) Represents average rent over the lease term consisting of base minimum rent, common area costs, and real estate taxes.
(4) Excluding anchors, percent in lieu, and specialty leasing.
(5) Represents expiring rent at end of lease consisting of base minimum rent, common area costs, and real estate taxes.
|
| | |
Q4 2015 Supplemental Package | | 20 |
Glossary of Terms ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828016011967/rouselogoa02a06.jpg)
|
| |
Anchor/Traditional Anchor | Department stores and discount department stores in traditional anchor spaces whose merchandise appeals to a broad range of shoppers or spaces which are greater than 70,000 square feet. |
Average Rent | Represents average rent over the term consisting of base minimum rent, common area costs, and real estate taxes. |
Average Rent Spread | Dollar spread between Average Rent and Expiring Rent. |
Expiring Rent | Represents rent at the end of the lease consisting of base minimum rent, common area costs, and real estate taxes. |
Freestanding | Outparcel retail locations (locations that are not attached to the primary complex of buildings that comprise a shopping center). Excludes anchor stores. |
Gross Leasable Area (GLA) | Total gross leasable space at 100%. |
In-Place Rent | Weighted average rental rate of mall stores as of a point in time. Rent is presented on a cash basis and consists of base minimum rent, common area costs, and real estate taxes. |
Initial Rent | Represents initial rent at the beginning of the term consisting of base minimum rent, common area costs, and real estate taxes. |
Initial Rent Spread | Dollar spread between Initial Rent and Expiring Rent. |
Leased Area | Leased area represents the sum of: (1) tenant occupied space lease and (2) all leases signed for currently vacant space and (3) tenants no longer occupying space, but still paying rent for all inline mall shop and freestanding retail locations, excluding anchors (Leased Area). Leased percentage is the Leased Area over the mall and Freestanding Area. |
Mall | All mall shop locations exclude anchor and freestanding stores. |
Occupancy Cost | Ratio of total tenant charges (rent and reimbursement of common area charges, real estate tax and insurance) to comparative sales for tenants less than 10,000 square feet. |
Occupied Area | Occupied area represents the sum of: (1) tenant occupied space under lease and (2) tenants no longer occupying space, but still paying rent for all inline mall shop and freestanding retail locations, excluding anchors (Occupied Area). Occupied percentage is the Occupied Area over the Mall and Freestanding Area. |
Operating Portfolio | Portfolio excluding properties undergoing substantial redevelopment and special consideration properties. |
Specialty Leasing | Temporary tenants typically on license agreements with terms in excess of twelve months and are generally cancellable by the Company with notice ranging from 30-90 days. |
Tenant Sales | Rolling twelve month sales for mall and freestanding stores less than 10,000 square feet for those tenants reporting. |
|
| | |
Q4 2015 Supplemental Package | | 21 |
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