Attached files
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| 8-K - 8-K - InvenTrust Properties Corp. | d616905d8k.htm |
 Oct. 24, 2013
Strategy & Performance Update
Capturing the
Recovery
Cycle:
A
Focus
on
Growth,
A
Commitment
to
Value
Creation
Exhibit 99.1 |
 2
Forward-Looking Statements
The companies depicted in the photographs herein may have proprietary
interests in their trade names and trademarks and nothing herein shall be considered to be an endorsement, authorization or
approval of Inland American by the companies. Furthermore, none of these
companies are affiliated with Inland American in any manner. To obtain a prospectus for our offering made pursuant to our
Distribution Reinvestment Plan, please contact us at 2901 Butterfield Road,
Oak Brook, Illinois 60523, Attention: Investor Relations, or by telephone, toll free, at (800) 826-8228. A copy of the
prospectus
is
also
available
on
our
website
at
www.inlandamerican.com
under
the
“SEC
Filings”
section.
This presentation contains “forward-looking statements,” which
are not historical facts, within the meaning of the Private Securities Litigation Reform Act of 1995. We intend that these
forward-looking statements be subject to the safe harbor provisions
created by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
statements include statements regarding management's intentions, beliefs,
expectations, representations, plans or predictions of the future, including certain events for which the timing and
occurrence thereof require Board approval. Our actual results, performance
or achievements may differ materially from those expressed or implied by these forward-looking statements. In some
cases, you can identify forward-looking statements by the use of words
such as “may,” “should,” “goal,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “expand,” “maintain,”
“create,” “strategies,” “believe,”
“estimate,” “predict,” “variable,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of
these terms or similar expressions. Such forward-looking statements are
necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are
inherently uncertain. These forward-looking statements involve numerous
risks and uncertainties that could cause actual results to be materially different from those set forth in the forward-
looking statements. Factors that may cause actual results to differ
materially from current expectations are outlined more particularly in our filings with the SEC, including our Annual Report on
Form 10-K for the year ended December 31, 2012 and any subsequent
Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, which filings are available from the SEC. These factors
include, but are not limited to: •
financial market disruptions current and future economic conditions could adversely affect our ability to refinance or secure additional debt financing at attractive terms as well as the values of
our investments;
• our ongoing strategy involves the disposition of
properties; however, we may be unable to sell a property at acceptable terms and conditions, if at all. Our strategy also depends on future
acquisitions, and we may not be successful in identifying and consummating
these transactions;
• our ability to successfully close certain sale transactions and
receive related proceeds is subject to a number of conditions outside our control, which may not be satisfied;
there is no assurance that we will be able to continue paying cash
distributions or that distributions will increase over time;
• an ongoing investigation by the SEC and the receipt of two related
derivative demands by stockholders to conduct investigations and a lawsuit related to the derivative demands.
The SEC’s investigation, the derivative demands, or both could have a
material adverse impact on our business;
• funding distributions from sources other than cash flow from
operating activities may negatively impact our ability to sustain or pay distributions and will result in us having less cash available
for other uses;
• there is no established public market for our shares,
and stockholders may not be able to sell their shares, including through our share repurchase program;
• increasing vacancy rates for certain classes of real estate assets
and possible disruption in the financial markets could adversely affect the value of our assets;
• we may suffer adverse consequences due to the financial difficulties,
bankruptcy or insolvency of our tenants;
• our investments in equity and debt securities have materially
impacted, and may in the future, materially impact our results;
• the financial covenants under our credit agreement may restrict our
ability to make distributions and our operating and acquisition activities;
• our borrowings may reduce the funds available for distribution and
increase the risk of loss since defaults may cause us to lose the properties securing the loans;
• two tenants generated a significant portion of our revenue, and
rental payment defaults by these significant tenants could adversely affect our results of operations;
• we are subject to conflicts of interest with affiliates of our
sponsor, which may affect our acquisition of properties and financial performance;
• The estimated value of our common stock is based on a number of
assumptions and estimates that may not be accurate or complete and is also subject to a number of limitations;
• we rely on our business manager and property managers to manage our
business and assets, and pay significant fees to these parties; and
• if we fail to qualify as a REIT, our operations and distributions to
stockholders will be adversely affected.
We caution you not to place undue reliance on any forward-looking
statements, which are made as of the date of this presentation. We undertake no obligation to update publicly any of these
forward-looking statements to reflect actual results, new information or
future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the
extent required by applicable laws. If we update one or more
forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other
forward-looking statements. This
material is neither an offer to sell nor the solicitation of an offer to buy any security, which can be made only by the prospectus which has been filed or registered with appropriate state and
federal regulatory agencies. No regulatory agency has passed on or endorsed
the merits of our offering. Any representation to the contrary is unlawful. |
 3
Today’s Agenda
•
Long-Term Strategy Review & Execution
•
Financial Review
•
Other Topics
•
Q&A Session |
 4
Inland American’s Long-Term Strategy
Sustainable stockholder distributions while maintaining capital
preservation
Tailoring our portfolio into Retail, Lodging and Student Housing
o
Expand & perfect these growth portfolios
Position for stockholder liquidity
o
Multiple liquidity events
**Our goals anticipate capturing the recovery cycle**
|
 5
Strategy Execution –
Tailoring Our Portfolio
Net Lease Transaction -
Details
o
Initial closing –
Occurred in late Sept. (Net proceeds about $314M)
o
Second closing –
End of 2013 or early 2014
o
Final closing -
First half of 2014
•
On Aug. 9 , we announced a deal to sell $2.1B of net lease
assets
•
The transaction is expected to be executed through multiple
closings:
th |
 6
Strategy Execution –
Tailoring Our Portfolio
Net Lease Transaction -
Details
•
•
Other Potential Uses:
•
We are evaluating alternatives to provide liquidity to our
stockholders, such as a share repurchase.
This transaction is expected to provide us with approximately
$1 billion in additional capital to support our strategic initiatives
Potential use of the net proceeds:
1.
Invest in high quality assets in our 3 targeted asset groups
2.
Pay down and reduce debt |
 7
Portfolio contained approximately $3 billion of net lease properties
Core Portfolio as of 12/31/12
Based on undepreciated asset values
37%
Retail
$4.1B
585 Properties
29%
Lodging
$3.3B
16,345 Rooms
17%
Office
$1.9B
42 Properties
9%
Ind / Dist
$1.0B
53 Properties
8%
Multi-Family
$0.9B
5,311 Units
5,212 Beds |
 8
Inland American Portfolio by Mid-2014
Many variables exist over the next 8 months before the final closing of the
net lease transaction, so the final portfolio breakdown by asset class
may differ from portfolio shown above Lodging
Office & Ind
Student Housing
Multi-Tenant
Retail |
 9
Strategy Execution -
Recent Acquisitions |
 10
Student Housing Portfolio Strategies
•
Continue to grow the student housing portfolio
Purpose
built
–
acquisition
or
development
Large universities
•
Continue to invest in innovative design and technology ideas
and operational excellence programs to attract students
•
Create and reinforce relationships with universities,
municipalities and local owners
•
Continue to expand our platform
with management expertise and
development capabilities |
 11
Retail Portfolio Strategies
•
Focus portfolio towards multi-tenant assets in favorable
demographic & geographic locations
•
Rotate capital out of single-tenant assets into multi-tenant
anchored centers
•
Maintain operational efficiencies |
 12
Lodging Portfolio Strategies
•
Expand ownership of premium branded upper-upscale hotels to
further enhance our portfolio
•
Harvest positive fundamentals / Capital rotation
Historically low supply growth is forecasted
Upper upscale segment should see continued strong revenue growth
Look for high barriers-to-entry in top-25 urban markets
|
 13
Same-Store NOI Growth
Up 2.2% for the first half of 2013
0.3%
8.4%
1.8%
1.4%
4.9%
2.2%
4%
2%
0%
2%
4%
6%
8%
10%
Retail
Lodging
Office
Industrial
Family
Total
-
-
-
-
-
Multi- |
 14
Funds from Operations
•
First half of 2013 -
$247.0 million or $0.276 per share
•
Maintaining guidance of $0.50 to $0.51 for the year
(assumes some dilution due to dispositions
and acquisitions during 2013) $226,686
$246,718
$200,000
$220,000
$240,000
$260,000
YTD 2012
YTD 2013
FFO in ‘000s |
 15
Distributions
•
$0.50 per share annualized
•
$223.8 million paid in the first half of 2013
•
$2.6 billion paid since inception
•
As of September 2013, Inland American investors have
received between $2.33 to $4.29 per share in distributions
depending on the timing of their investment. |
 16
Debt Maturities
% of Total Debt
as of 06/30/13
12.3% 17.5%
25.8%
28.0%
$274M
$590M
$650M
$921M
$1,359M
$1,479M
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2013
2014
2015
2016
2017
Thereafter
Fixed
Variable
5.2%
11.2% |
 17
Additional Subjects to Discuss Today
•
Estimated per Share Value for 2013
•
Timing of Potential Liquidity Events for Targeted
Asset Classes
•
Proxy / Charter Changes |
 18
Estimated Per Share Value
•
The valuation will be performed by Real Globe.
•
Real Globe will manage the process independently
and they will use the Net Asset Value method, which
is the same method used in 2012.
•
We expect the process to be completed in mid-
December. |
 19
Potential Liquidity Events for Stockholders
•
Evaluating alternatives to provide liquidity, such as exploring
options for a share repurchase. Funds would likely come from
net lease disposition.
•
Timing for larger liquidity events (Listings, Spin-Offs, Mergers)
would follow continued execution of long-term strategy and
favorable market conditions. We expect the first event to occur
over the next 12 to 24 months, if in the best interest of our
stockholders to do so.
•
Our Board of Directors has not yet made any determinations
regarding the type or timing of any liquidity alternatives.
•
We believe optimal long-term liquidity for our stockholders will
be achieved by executing business strategies for each segment.
|
 20
Proxy / Charter Changes
•
Proxy filed last week / contains charter changes
Increases the options available to the Company to provide liquidity
events
Removes or revises certain provisions in connection with our capital
raise from 2006 to 2009
Have the charter comparable to those of other traded companies
•
Two sets of charter changes
The first set of charter changes removes some of the restrictive
provisions to our existing charter, which we need removed in order to
execute certain aspects of our strategy
In the second set of charter changes, we are proposing to further
amend the charter beyond those in the first set of charter changes to
be effective
if
and
when
a
“Self-Management”
transaction is
completed |
 21
Key Points & Themes to Remember
•
Our overall cash flow and operating performance continues to
improve
•
Made significant progress on our stated long-term strategy
•
Our debt maturities and capital structure are stable, providing
us flexibility to execute our business strategies
•
We have dedicated and capable management teams with
expertise in each segment with a unique, scalable operating
platform that provides strong and consistent results
•
We remain confident in the sustainability of our distributions
|
 Oct. 24, 2013
Q&A Session
Capturing
the
Recovery
Cycle:
A
Focus
on
Growth,
A
Commitment
to
Value
Creation |
 23
FFO Reconciliation Slide
In Millions
6/30/2013
6/30/2012
Net income (loss) attributable to the Company
(28,270)
(48,193)
Add:
Depreciation and amortization related to investment properties and investment in
unconsolidated entities 221,213
242,489
Provision for asset impairment reflected in continuing and discontinued operations
189,544
27,887
Impairment, loss and (gain) of investment in unconsolidated entities, net
568
4,200
Impairment, loss and (gain) of investment property reflected in equity in earnings of
unconsolidated entities, net (3,416)
(1,928)
Less:
Gains from property sales and transfer of assets
132,921
(2,231)
Funds from Operations
246,718
226,686
Weighted Average Shares Outstanding
894,679,702
875,037,776
Six months ended |
 24
Additional Proxy Information & Where to Find It
The Company plans to file a definitive proxy statement with the Securities
and Exchange Commission (the “SEC”) in connection with its
2013 annual meeting of stockholders. The Company and its Business
Manager, and their directors and certain of their officers may be deemed,
under the SEC’s rules, to be participants in a solicitation of
proxies from the Company’s stockholders in connection with the 2013
annual meeting of stockholders. INFORMATION REGARDING THOSE DIRECTORS AND
OFFICERS AND THEIR RESPECTIVE INTERESTS WILL BE SET FORTH IN THE
DEFINITIVE PROXY STATEMENT. THE DEFINITIVE
PROXY STATEMENT AND OTHER DOCUMENTS FILED BY THE COMPANY WITH THE SEC
WILL BE AVAILABLE FREE OF CHARGE AT THE SEC’S WEBSITE
(WWW.SEC.GOV). IN ADDITION, STOCKHOLDERS MAY ALSO OBTAIN FREE COPIES OF
SUCH DOCUMENTS BY DIRECTING A WRITTEN REQUEST TO 2901 BUTTERFIELD
ROAD, OAK BROOK, ILLINOIS 60523, ATTENTION: INVESTOR RELATIONS.
COPIES OF THE COMPANY’S FILINGS WITH THE SEC MAY ALSO BE
OBTAINED AT THE “INVESTOR RELATIONS” SECTION OF THE
COMPANY’S WEBSITE AT WWW.INLANDAMERICAN.COM. INVESTORS SHOULD
READ THE DEFINITIVE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE
IT CONTAINS IMPORTANT INFORMATION.
•
• |