RPT Realty - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - February 10, 2015

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Exhibit 99.1

RAMCO-GERSHENSON PROPERTIES TRUST REPORTS
FINANCIAL AND OPERATING RESULTS FOR THE FOURTH QUARTER AND YEAR-END 2014

FARMINGTON HILLS, Michigan – February 10, 2015 - Ramco-Gershenson Properties Trust (NYSE:RPT) today announced its financial and operating results for the three and twelve months ended December 31, 2014.

FULL YEAR 2014 HIGHLIGHTS:

•
Reported Operating Funds from Operations (“Operating FFO”) of $1.27 per diluted share, compared to $1.19 for the comparable period in 2013.
•
Increased same-center net operating income (“NOI”) by 3.3%.
•
Signed 345 leases encompassing 2.3 million square feet at comparable rental growth of 6.3%.
•
Increased annual dividend by 7%, to $0.80 per share.
•
Ended 2014 with core portfolio leased occupancy of 95.5%.

"During 2014, we continued our success in significantly improving our shopping center portfolio supported by the further diversification of our markets, the achievement of an even stronger demographic profile, and producing higher average base rents.  All of these factors are contributing to predictable, strong same-center NOI growth," said Dennis Gershenson, President and Chief Executive Officer.   "In 2015, our primary focus will be on driving quality through redeveloping and re-leasing of our core portfolio and the continued sale of non-core properties.”

FINANCIAL RESULTS:
For the three months ended December 31, 2014:
•
Operating FFO of $29.1 million, or $0.33 per diluted share, compared to $21.8 million or $0.30 per diluted share for the same period in 2013.
•
Funds from Operations (“FFO”) of $3.8 million, or $0.05 per diluted share, compared to $20.6 million, or $0.28 per diluted share for the same period in 2013. FFO for the fourth quarter of 2014 was reduced as the result of a non-cash impairment charge of approximately $23.3 million related to land available for development or sale.
•
Net loss available to common shareholders of $14.0 million, or $0.18 per diluted share, compared to $7.0 million, or $0.11 per diluted share for the same period in 2013.

For the twelve months ended December 31, 2014:

•
Operating FFO of $103.5 million, or $1.27 per diluted share, compared to $81.9 million, or $1.19 per diluted share for the same period in 2013.
•
FFO of $70.3 million, or $0.94 per diluted share, compared to $79.9 million, or $1.16 per diluted share for the same period in 2013. FFO for 2014 was reduced as the result of non-cash impairment charge of approximately $23.3 million related to land available for development or sale.
•
Net loss available to common shareholders of $9.6 million, or $0.14 per diluted share, compared to net income available to common shareholders of $3.7 million, or $0.06 per diluted share for the same period in 2013.






FOURTH QUARTER OPERATING RESULTS:

•
Same-center NOI growth of 2.8%.
•
Core portfolio leased occupancy of 95.5% and physical occupancy of 94.9%.
•
Signed 86 leases encompassing approximately 0.5 million square feet at comparable rental growth of 8.1%, including 56 renewals totaling approximately 0.3 million square feet at comparable rental growth of 7.7%.

YEAR-END BALANCE SHEET METRICS:

•
Net debt to total market capitalization of 35.7%.
•
Net debt to EBITDA of 5.9x, interest coverage of 3.9x, and fixed charge coverage of 3.0x.
•
Weighted average term of debt to maturity of 6.5 years.

INVESTMENT ACTIVITY:
Acquisitions and Dispositions
During the fourth quarter, the Company sold three non-core shopping centers for $23.1 million: Northwest Crossing, a 124,000 square foot shopping center anchored by Ross Dress for Less, HH Gregg, and OfficeMax, in Knoxville, Tennessee; Fraser Shopping Center, a 68,000 square foot shopping center anchored by Oakridge Market and Family Dollar in Fraser, Michigan and Lake Orion Plaza, a 141,000 square foot shopping center anchored by Kmart and Hollywood Market. Proceeds from the sales were used to reduce debt and fund the Company’s expansion and redevelopment projects.

In 2014, the Company acquired $321.9 million of high-quality shopping centers in the targeted metropolitan markets of Cincinnati, Minneapolis, and Fort Collins. The shopping centers encompass over 1.5 million square feet and are anchored by a number of leading retailers, including Whole Foods, Dick's Sporting Goods, Sprouts Market, Home Depot, Bed Bath & Beyond, and buy buy Baby. Also during the year, the Company sold $32.0 million of non-core shopping centers.

Development and Redevelopment
During 2014, the Company initiated a number of new value-add redevelopment projects. At December 31, 2014, the Company's redevelopment and development pipeline consisted of eight projects with an estimated total cost of $56.5 million.

FINANCING ACTIVITY:

During the quarter, the Company closed a $100 million private placement of senior unsecured notes. The financing consists of $50 million of notes with a ten-year term priced at a fixed interest rate of 4.16% and $50 million of notes with a twelve-year term priced at a fixed interest rate of 4.30%.

DIVIDEND:

During the fourth quarter, the Company declared a regular cash dividend of $0.20 per common share for the period October 1, 2014 through December 31, 2014 and a Series D convertible perpetual preferred share dividend of $0.90625 per share for the same period. The dividends were paid on January 2, 2015 to shareholders of record as of December 19, 2014. The Operating FFO payout ratio was 61.0%.




2015 GUIDANCE:

The Company has affirmed its 2015 guidance for Operating FFO to $1.27 to $1.33 per diluted share.

CONFERENCE CALL/WEBCAST:

Ramco-Gershenson Properties Trust will host a live broadcast of its fourth quarter conference call on Wednesday, February 11, 2015 at 9:00 a.m. eastern time, to discuss its financial and operating results. The live broadcast will be available on-line at www.rgpt.com and www.investorcalendar.com and also by telephone at (877) 407-9205, no pass code needed. A replay will be available shortly after the call on the aforementioned websites (for ninety days) or by telephone at (877) 660-6853, (Conference ID: 13598785), for one week.
 
SUPPLEMENTAL MATERIALS:
The Company’s quarterly financial and operating supplement is available on its corporate web site at www.rgpt.com. If you wish to receive a copy via email, please send requests to dhendershot@rgpt.com.

ABOUT RAMCO-GERSHENSON PROPERTIES TRUST:

Ramco-Gershenson Properties Trust (NYSE:RPT) is a fully integrated, self-administered, publicly-traded real estate investment trust (REIT) based in Farmington Hills, Michigan.  The Company's business is the ownership and management of large, multi-anchor shopping centers primarily in a dozen of the largest metropolitan markets in the United States.  At December 31, 2014, the Company owned interest in and managed a portfolio of 80 shopping centers and one office building with approximately 16.9 million square feet of gross leasable area. At December 31, 2014, the Company's core operating portfolio was 95.5% leased. Additional information regarding the Company is available on its corporate website: www.rgpt.com.

This press release may contain forward-looking statements that represent the Company’s expectations and projections for the future. Management of Ramco-Gershenson believes the expectations reflected in any forward-looking statements made in this press release are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary, including deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, our continuing ability to qualify as a REIT and other factors discussed in the Company’s reports filed with the Securities and Exchange Commission.



Company Contact:
Dawn L. Hendershot, Vice President of Investor Relations
and Corporate Communications
31500 Northwestern Highway, Suite 300
Farmington Hills, MI 48334
dhendershot@rgpt.com
(248) 592-6202






RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
 
 
 
 
 
December 31,
 
2014
 
2013
ASSETS
 
 
 
Income producing properties, at cost:
 
 
 
Land
$
341,388

 
$
284,686

Buildings and improvements
1,592,644

 
1,340,531

Less accumulated depreciation and amortization
(287,177
)
 
(253,292
)
Income producing properties, net
1,646,855

 
1,371,925

Construction in progress and land available for development or sale
74,655

 
101,974

Net real estate
1,721,510

 
1,473,899

Equity investments in unconsolidated joint ventures
28,733

 
30,931

Cash and cash equivalents
9,335

 
5,795

Restricted cash
8,163

 
3,454

Accounts receivable, net
11,997

 
9,648

Other assets, net
168,641

 
128,521

TOTAL ASSETS
$
1,948,379

 
$
1,652,248

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Notes payable:
 
 
 
Senior unsecured notes payable
$
520,000

 
$
365,000

Mortgages payable
363,580

 
333,049

Unsecured revolving credit facility
10,000

 
27,000

Junior subordinated notes
28,125

 
28,125

Total notes payable
921,705

 
753,174

Capital lease obligation
1,828

 
5,686

Accounts payable and accrued expenses
44,232

 
32,026

Other liabilities
64,384

 
48,593

Distributions payable
17,951

 
14,809

TOTAL LIABILITIES
1,050,100

 
854,288

 
 
 
 
Commitments and Contingencies


 


 
 
 
 
Ramco-Gershenson Properties Trust ("RPT") Shareholders' Equity:
 
 
 

Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series D Cumulative Convertible Perpetual Preferred Shares, (stated at liquidation preference $50 per share), 2,000 shares issued and outstanding as of December 31, 2014 and December 31, 2013
$
100,000

 
$
100,000

Common shares of beneficial interest, $0.01 par, 120,000 shares authorized, 77,573 and 66,669 shares issued and outstanding as of December 31, 2014 and 2013, respectively
776

 
667

Additional paid-in capital
1,130,262

 
959,183

Accumulated distributions in excess of net income
(356,715
)
 
(289,837
)
Accumulated other comprehensive (loss) income
(1,966
)
 
84

TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT
872,357

 
770,097

Noncontrolling interest
25,922

 
27,863

TOTAL SHAREHOLDERS' EQUITY
898,279

 
797,960

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
1,948,379

 
$
1,652,248



RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
 
 
 
 
Three Months Ended December 31,
Twelve Months Ended December 31,
 
2014
 
2013
 
2014
 
2013
REVENUE
 
 
 
 
 
 
 
Minimum rent
$
43,635

 
$
34,891

 
$
157,691

 
$
124,169

Percentage rent
57

 
9

 
264

 
209

Recovery income from tenants
15,999

 
11,861

 
52,828

 
40,018

Other property income
2,935

 
762

 
5,521

 
3,337

Management and other fee income
531

 
493

 
2,059

 
2,335

TOTAL REVENUE
63,157

 
48,016

 
218,363

 
170,068

 
 
 
 
 
 
 
 
EXPENSES
 
 
 
 
 
 
 
Recoverable operating & real estate tax expense
18,524

 
13,007

 
58,793

 
43,355

Other non-recoverable operating expense
1,007

 
871

 
3,633

 
3,006

Depreciation and amortization
20,605

 
15,883

 
81,182

 
56,305

Acquisition costs
168

 
538

 
1,890

 
1,322

General and administrative expense
5,575

 
5,238

 
21,670

 
20,951

Provision for impairment
27,865

 
9,669

 
27,865

 
9,669

TOTAL EXPENSES
73,744

 
45,206

 
195,033

 
134,608

 
 
 
 
 
 
 
 
OPERATING (LOSS) INCOME
(10,587
)
 
2,810

 
23,330

 
35,460

 
 
 
 
 
 
 
 
OTHER INCOME AND EXPENSES
 
 
 
 
 
 
 
Other expense, net
(74
)
 
(249
)
 
(689
)
 
(965
)
Gain on sale of real estate
7,927

 
378

 
10,857

 
4,279

Earnings (loss) from unconsolidated joint ventures
411

 
268

 
75

 
(4,759
)
Interest expense
(9,866
)
 
(7,791
)
 
(33,742
)
 
(29,075
)
Amortization of deferred financing fees
(331
)
 
(378
)
 
(1,446
)
 
(1,447
)
Deferred gain recognized on real estate
—

 
—

 
117

 
5,282

Loss on extinguishment of debt
—

 
(340
)
 
(860
)
 
(340
)
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE TAX
(12,520
)
 
(5,302
)
 
(2,358
)
 
8,435

Income tax provision
(36
)
 
(63
)
 
(54
)
 
(64
)
(LOSS) INCOME FROM CONTINUING OPERATIONS
(12,556
)
 
(5,365
)
 
(2,412
)
 
8,371

 
 
 
 
 
 
 
 
DISCONTINUED OPERATIONS
 
 
 
 
 
 
 
(Loss) gain on sale of real estate
—

 
(74
)
 
—

 
2,120

Income from discontinued operations
—

 
130

 
—

 
971

INCOME FROM DISCONTINUED OPERATIONS
—

 
56

 
—

 
3,091

 
 
 
 
 
 
 
 
NET (LOSS) INCOME
(12,556
)
 
(5,309
)
 
(2,412
)
 
11,462

Net loss (income) attributable to noncontrolling partner interest
351

 
169

 
48

 
(465
)
NET (LOSS) INCOME ATTRIBUTABLE TO RPT
(12,205
)
 
(5,140
)
 
(2,364
)
 
10,997

Preferred share dividends
(1,812
)
 
(1,812
)
 
(7,250
)
 
(7,250
)
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS
$
(14,017
)
 
$
(6,952
)
 
$
(9,614
)
 
$
3,747

 
 
 
 
 
 
 
 
(LOSS) EARNINGS PER COMMON SHARE, BASIC
 
 
 
 
 
 
 
Continuing operations
$
(0.18
)
 
$
(0.11
)
 
$
(0.14
)
 
$
0.01

Discontinued operations
—

 
—

 
—

 
0.05

 
$
(0.18
)
 
$
(0.11
)
 
$
(0.14
)
 
$
0.06

(LOSS) EARNINGS PER COMMON SHARE, DILUTED
 
 
 
 
 
 
 
Continuing operations
$
(0.18
)
 
$
(0.11
)
 
$
(0.14
)
 
$
0.01

Discontinued operations
—

 
—

 
—

 
0.05

 
$
(0.18
)
 
$
(0.11
)
 
$
(0.14
)
 
$
0.06

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
 
 
 
 
 
 
Basic
77,573

 
64,412

 
72,118

 
59,336

Diluted
77,573

 
64,412

 
72,118

 
59,728




RAMCO-GERSHENSON PROPERTIES TRUST
FUNDS FROM OPERATIONS
(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
 
Net (loss) income available to common shareholders
 
$
(14,017
)
 
$
(6,952
)
 
$
(9,614
)
 
$
3,747

Adjustments:
 
 
 
 
 
 

 
 

Rental property depreciation and amortization expense
 
20,574

 
15,802

 
80,826

 
56,316

Pro-rata share of real estate depreciation from unconsolidated joint ventures
 
596

 
722

 
4,719

 
3,689

(Gain) loss on sale of depreciable real estate
 
(7,556
)
 
74

 
(10,022
)
 
(2,120
)
 Loss on sale of joint venture depreciable real estate (1)
 
—

 
—

 
—

 
6,454

 Provision for impairment on income-producing properties
 
4,580

 
9,342

 
4,580

 
9,342

Deferred gain recognized on of real estate
 
—

 
—

 
(117
)
 
(5,282
)
Noncontrolling interest in Operating Partnership (2)
 
(351
)
 
(169
)
 
(48
)
 
465

Subtotal
 
$
3,826

 
$
18,819

 
$
70,324

 
$
72,611

 
 
 
 
 
 
 
 
 
Add preferred share dividends (if converted) (3)
 
—

 
1,812

 
—

 
7,250

FFO
 
$
3,826

 
$
20,631

 
$
70,324

 
$
79,861

 
 
 
 
 
 
 
 
 
Provision for impairment on land available for development or sale
 
23,285

 
327

 
23,285

 
327

Loss on extinguishment of debt
 
—

 
340

 
860

 
340

Gain on extinguishment of joint venture debt, net of RPT expenses
 
—

 
—

 
(106
)
 
—

Acquisition costs (4)
 
168

 
538

 
1,890

 
1,322

Add preferred share dividends (if converted) (3)
 
1,812

 
—

 
7,250

 
—

OPERATING FFO
 
$
29,091

 
$
21,836

 
$
103,503

 
$
81,850

 
 
 
 
 
 
 
 
 
Weighted average common shares
 
77,564

 
64,412

 
72,118

 
59,336

Shares issuable upon conversion of Operating Partnership Units (2)
 
2,247

 
2,253

 
2,250

 
2,257

Dilutive effect of securities
 
222

 
392

 
217

 
392

Subtotal
 
80,033

 
67,057

 
74,585

 
61,985

Shares issuable upon conversion of preferred shares (3)
 
7,019

 
6,940

 
7,019

 
6,940

WEIGHTED AVERAGE EQUIVALENT SHARES OUTSTANDING, DILUTED
 
87,052

 
73,997

 
81,604

 
68,925

 
 
 
 
 
 
 
 
 
FFO, PER DILUTED SHARE 
 
$
0.05

 
$
0.28

 
$
0.94

 
$
1.16

 
 
 
 
 
 
 
 
 
OPERATING FFO, PER DILUTED SHARE
 
$
0.33

 
$
0.30

 
$
1.27

 
$
1.19

 
 
 
 
 
 
 
 
 
Dividend per common share
 
$0.20000
 
$0.18750
 
$0.77500
 
$0.71150
Payout ratio - Operating FFO
 
60.6
%
 
62.5
%
 
61.0
%
 
59.8
%
 
 
 
 
 
 
 
 
 

(1) 
Amount included in earnings (loss) from unconsolidated joint ventures.
(2) 
The total noncontrolling interest reflects OP units convertible 1:1 into common shares or the cash value thereof.
(3) 
Series D convertible preferred shares were dilutive for FFO for the year ended December 31, 2013 and anti-dilutive for the comparable period in 2014.
(4) 
Prior periods have been restated to reflect the add back of acquisition costs beginning in 1Q14.

Management considers funds from operations, also known as “FFO”, to be an appropriate supplemental measure of the financial performance of an equity REIT.  Under the NAREIT definition, FFO represents net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of depreciable property and excluding impairment provisions on depreciable real estate or on investments in non-consolidated investees that are driven by measurable decreases in the fair value of depreciable real estate held by the investee, plus depreciation and amortization, (excluding amortization of financing costs). Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis.

Also, we consider “Operating FFO” a meaningful, additional measure of financial performance because it excludes acquisition costs and periodic items such as impairment provisions on land available for sale, bargain purchase gains, and gains or losses on extinguishment of debt that are not adjusted under the current NAREIT definition of FFO.  We provide a reconciliation of FFO to Operating FFO. FFO and Operating FFO should not be considered alternatives to GAAP net income available to common shareholders or as alternatives to cash flow as measures of liquidity.

While we consider FFO and Operating FFO useful measures for reviewing our comparative operating and financial performance between periods or to compare our performance to different REITs, our computations of FFO and Operating FFO may differ from the computations utilized by other real estate companies, and therefore, may not be comparable.

RPT Realty Reports