Attached files
| file | filename |
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| EX-99.2 - EXHIBIT 99.2 - RETAIL PROPERTIES OF AMERICA, INC. | ex-9923x31x17.htm |
| 8-K - 8-K - RETAIL PROPERTIES OF AMERICA, INC. | form8-k3x31x17.htm |
Exhibit 99.1
RETAIL PROPERTIES OF AMERICA, INC.
REPORTS FIRST QUARTER 2017 RESULTS
Oak Brook, IL – May 2, 2017 – Retail Properties of America, Inc. (NYSE: RPAI) (the “Company”) today reported financial and operating results for the quarter ended March 31, 2017.
FINANCIAL RESULTS
For the quarter ended March 31, 2017, the Company reported:
▪ | Net (loss) income attributable to common shareholders of $(11.5) million, or $(0.05) per share, compared to $45.1 million, or $0.19 per share, for the same period in 2016; |
▪ | Funds from operations (FFO) attributable to common shareholders of $0.5 million, or $0.00 per share, compared to $76.4 million, or $0.32 per share, for the same period in 2016; and |
▪ | Operating funds from operations (Operating FFO) attributable to common shareholders of $66.9 million, or $0.28 per share, compared to $65.7 million, or $0.28 per share, for the same period in 2016. |
The primary driver of net loss attributable to common shareholders and FFO attributable to common shareholders for the quarter ended March 31, 2017 was approximately $60.2 million, or $0.25 per share, of premium and costs incurred in connection with the defeasance of the IW JV cross-collateralized portfolio of mortgages payable, discussed below.
OPERATING RESULTS
For the quarter ended March 31, 2017, the Company’s portfolio results were as follows:
▪ | 2.0% increase in same store net operating income (NOI) over the comparable period in 2016; |
▪ | Total same store portfolio percent leased, including leases signed but not commenced: 95.3% at March 31, 2017, down 30 basis points from 95.6% at December 31, 2016 and up 20 basis points from 95.1% at March 31, 2016; |
▪ | Retail portfolio percent leased, including leases signed but not commenced: 94.3% at March 31, 2017, down 70 basis points from 95.0% at December 31, 2016 and down 30 basis points from 94.6% at March 31, 2016; |
▪ | Retail portfolio annualized base rent (ABR) per occupied square foot of $17.52 at March 31, 2017, up 5.3% from $16.64 ABR per occupied square foot at March 31, 2016; |
▪ | 466,000 square feet of retail leasing transactions comprised of 121 new and renewal leases at an ABR per square foot of $27.14; and |
▪ | Positive comparable cash leasing spreads of 21.8% on new leases and 8.6% on renewal leases for a blended spread of 10.0%. |
“We are pleased to report another solid quarter of financial and operational results, highlighted by our strong blended re-leasing spreads of 10%, representing a record high for RPAI,” stated Steve Grimes, president and chief executive officer. “While recent tenant bankruptcies have caused short-term disruption in our same store NOI growth assumption for 2017, we view this as a tremendous opportunity to significantly mark-to-market rents and strengthen our long-term underlying cash flows, which is a direct result of the strong tenant demand to lease space in our high quality portfolio.
n Retail Properties of America, Inc.
T: 800.541.7661
www.rpai.com 2021 Spring Road, Suite 200
Oak Brook, IL 60523
In addition, we continue to make excellent progress on our 2017 transactional goals with 75% of our targeted retail dispositions closed, under contract or in LOI.”
INVESTMENT ACTIVITY
Dispositions
To date in 2017, the Company has completed, is under contract or has Letters of Intent (LOIs) for dispositions totaling $568.8 million. During the quarter, the Company completed $106.0 million of dispositions, which included the sales of three non-target multi-tenant retail assets for $80.0 million, one single-user parcel for $17.5 million and three single-user retail assets for $8.5 million.
Subsequent to quarter end, the Company completed the sales of four non-target multi-tenant retail assets, three of which were classified as held for sale as of March 31, 2017, for $56.7 million.
The Company is under contract to sell $201.0 million of dispositions, which includes 10 non-target multi-tenant retail assets for $194.7 million and two single-user retail assets for $6.3 million. In addition, the Company has LOIs to sell $205.1 million of dispositions, which includes nine non-target multi-tenant retail assets for $202.6 million and a single-user retail asset for $2.5 million. These transactions are expected to close throughout 2017, subject to satisfaction of customary closing conditions.
Acquisitions
To date in 2017, the Company has completed or is under contract for $125.5 million of acquisitions. During the quarter, as previously announced, the Company completed the acquisition of Main Street Promenade, located in the Chicago Metropolitan Statistical Area (MSA), for a gross purchase price of $88.0 million. In addition, the Company acquired the fee interest, which was previously subject to a ground lease with a third party, in an existing multi-tenant retail property for a gross purchase price of $2.0 million and an additional phase at our existing One Loudoun Downtown property for a gross purchase price of $4.1 million, both of which are located in the Washington, D.C. MSA. Subsequent to quarter end, the Company acquired an additional phase at One Loudoun Downtown for a gross purchase price of $2.2 million.
The Company remains under contract for the remaining phases at One Loudoun Downtown, representing an aggregate gross purchase price of up to $29.2 million. These transactions are expected to close during the second and third quarters of 2017 as the seller completes construction on stand-alone buildings at the property.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of March 31, 2017, the Company had approximately $2.1 billion of consolidated indebtedness, which resulted in a net debt to adjusted EBITDA ratio of 5.6x, or a net debt and preferred stock to adjusted EBITDA ratio of 6.0x. Consolidated indebtedness had a weighted average contractual interest rate of 3.49% and a weighted average maturity of 5.3 years.
During the quarter, as previously disclosed, the Company defeased the $379.4 million IW JV cross-collateralized portfolio of mortgages payable that was scheduled to mature in 2019 and had an interest rate of 7.50%. In connection with this transaction, the Company incurred approximately $60.2 million in defeasance costs. The fair value of these mortgages was approximately $45.1 million higher than the outstanding principal balance as of December 31, 2016. The Company also repaid $19.4 million of mortgage debt, excluding amortization, with an interest rate of 4.25% and incurred a prepayment penalty of $2.1 million.
In addition, during the quarter, the Company drew the full balance of a seven-year $200.0 million senior unsecured term loan (Term Loan Due 2023) with an interest rate of London Interbank Offered Rate (LIBOR) plus a credit spread of between 1.70% and 2.55%, based on the Company's leverage
ratio. The Company also entered into two interest rate swap agreements to effectively fix the interest rate on the Term Loan Due 2023 at 1.26% plus a credit spread through November 22, 2018.
GUIDANCE
The Company expects to generate net income attributable to common shareholders of $0.91 to $0.96 per share in 2017. The Company is maintaining its 2017 Operating FFO attributable to common shareholders guidance range of $1.00 to $1.05 per share, based, in part, on the following assumptions, which have not changed since the guidance we provided in our previous earnings release, except for the 2017 same store NOI growth assumption:
▪ | Revised 2017 same store NOI growth range of 1.25% to 2.25% from 2.0% to 3.0%; |
▪ | 2017 acquisitions range of $375 to $475 million; |
▪ | 2017 dispositions range of $800 to $900 million, including the sale of Schaumburg Towers; and |
▪ | 2017 general and administrative expenses range of $42 to $44 million. |
The Company’s revision to its 2017 same store NOI growth assumption is a direct result of recent tenant bankruptcies.
DIVIDEND
On April 25, 2017, the Company declared the second quarter 2017 Series A preferred stock cash dividend of $0.4375 per preferred share, for the period beginning April 1, 2017, which will be paid on June 30, 2017 to preferred shareholders of record on June 19, 2017.
On April 25, 2017, the Company also declared the second quarter 2017 quarterly cash dividend of $0.165625 per share on its outstanding Class A common stock, which will be paid on July 10, 2017 to Class A common shareholders of record on June 26, 2017.
WEBCAST AND CONFERENCE CALL INFORMATION
The Company’s management team will hold a webcast on Wednesday, May 3, 2017 at 11:00 AM (ET), to discuss its quarterly financial results and operating performance, as well as business highlights and outlook. In addition, the Company may discuss business and financial developments and trends and other matters affecting the Company, some of which may not have been previously disclosed.
A live webcast will be available online on the Company’s website at www.rpai.com in the INVEST section. A replay of the webcast will be available. To listen to the replay, please go to www.rpai.com in the INVEST section of the website and follow the instructions.
The conference call can be accessed by dialing (877) 705-6003 or (201) 493-6725 for international participants. Please dial in at least ten minutes prior to the start of the call to register. A replay of the call will be available from 2:00 PM (ET) on May 3, 2017 until midnight (ET) on May 17, 2017. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering pin number 13656698.
SUPPLEMENTAL INFORMATION
The Company has posted supplemental financial and operating information and other data in the INVEST section of its website.
ABOUT RPAI
Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located shopping centers in the United States. As of March 31, 2017, the Company owned 149 retail operating properties representing 25.4 million square feet. The Company is publicly traded on the
New York Stock Exchange under the ticker symbol RPAI. Additional information about the Company is available at www.rpai.com.
SAFE HARBOR LANGUAGE
The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “should”, “intends”, “plans”, “estimates”, “continue” or “anticipates” and variations of such words or similar expressions or the negative of such words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic, business and financial conditions, and changes in the Company’s industry and changes in the real estate markets in particular, rental rates and/or vacancy rates, frequency and magnitude of defaults on, early terminations of or non-renewal of leases by tenants, bankruptcy or insolvency of a major tenant or a significant number of smaller tenants, interest rates or operating costs, real estate valuations, the availability, terms and deployment of capital, general volatility of the capital and credit markets and the market price of the Company’s Class A common stock, risks generally associated with real estate acquisitions and dispositions, including the Company’s ability to identify and pursue acquisition and disposition opportunities, risks generally associated with redevelopment, including the impact of construction delays and cost overruns, the Company’s ability to lease redeveloped space and the Company’s ability to identify and pursue redevelopment opportunities, competitive and cost factors, the Company’s ability to enter into new leases or renew leases on favorable terms, the Company’s ability to create long-term shareholder value, satisfaction of closing conditions to the pending transactions described herein, the Company’s failure to successfully execute its non-target disposition program and capital recycling efforts, regulatory changes and other risk factors, including those detailed in the sections of the Company’s most recent Forms 10-K and 10-Q filed with the SEC titled “Risk Factors”. The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
NON-GAAP FINANCIAL MEASURES
As defined by the National Association of Real Estate Investment Trusts (NAREIT), an industry trade group, Funds From Operations (FFO) means net income (loss) computed in accordance with generally accepted accounting principles (GAAP), excluding gains (or losses) from sales of depreciable real estate, plus depreciation and amortization and impairment charges on depreciable real estate. The Company has adopted the NAREIT definition in its computation of FFO attributable to common shareholders. The Company believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing its performance and operations to those of other real estate investment trusts (REITs). The Company believes that FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends.
The Company also reports Operating FFO attributable to common shareholders, which is defined as FFO attributable to common shareholders excluding the impact of discrete non-operating transactions and other events which the Company does not consider representative of the comparable operating results of its real estate operating portfolio, which is its core business platform. Specific examples of discrete non-operating transactions and other events include, but are not limited to, the financial statement impact of gains or losses associated with the early extinguishment of debt or other liabilities, impairment charges to write down the carrying value of assets other than depreciable real estate, actual or anticipated settlement of litigation involving the Company, including associated legal costs, and executive and realignment separation charges, which are otherwise excluded from the Company’s calculation of FFO attributable to common shareholders. The Company believes that Operating FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. Operating FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends. Comparison of the Company’s presentation of Operating FFO attributable
to common shareholders to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
The Company also reports Net Operating Income (NOI), which it defines as all revenues other than straight-line rental income, amortization of lease inducements, amortization of acquired above and below market lease intangibles and lease termination fee income, less real estate taxes and all operating expenses other than straight-line ground rent expense and amortization of acquired ground lease intangibles, which are non-cash items. NOI consists of Same Store NOI and NOI from Other Investment Properties. Same Store NOI for the three months ended March 31, 2017 represents NOI from the Company’s same store portfolio consisting of 140 retail operating properties acquired or placed in service and stabilized prior to January 1, 2016. NOI from Other Investment Properties for the three months ended March 31, 2017 represents NOI primarily from properties acquired during 2016 and 2017, the Company’s one remaining office property, three properties where the Company has begun redevelopment and/or activities in anticipation of future redevelopment, the properties that were sold or held for sale in 2016 and 2017, the net income from the Company’s wholly-owned captive insurance company and the historical ground rent expense related to an existing same store investment property that was subject to a ground lease with a third party prior to the Company’s acquisition of the fee interest on April 29, 2016. The Company believes that NOI, Same Store NOI and NOI from Other Investment Properties, which are supplemental non-GAAP financial measures, provide an additional and useful operating perspective not immediately apparent from “Operating income” or “Net income attributable to common shareholders” in accordance with GAAP. The Company uses these measures to evaluate its performance on a property-by-property basis because they allow management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company’s operating results. NOI, Same Store NOI and NOI from Other Investment Properties do not represent alternatives to “Net income” or “Net income attributable to common shareholders” in accordance with GAAP as indicators of the Company’s financial performance. Comparison of the Company’s presentation of NOI, Same Store NOI and NOI from Other Investment Properties to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Adjusted EBITDA is a supplemental non-GAAP financial measure and represents net income attributable to common shareholders before interest, income taxes, depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing performance. The Company believes that Adjusted EBITDA is useful because it allows investors and management to evaluate and compare the Company’s performance from period to period in a meaningful and consistent manner in addition to standard financial measurements under GAAP. Adjusted EBITDA should not be considered an alternative to “Net income attributable to common shareholders” as an indicator of the Company’s financial performance. Comparison of the Company’s presentation of Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Net Debt to Adjusted EBITDA is a supplemental non-GAAP financial measure and represents (i) the Company’s total notional debt, excluding unamortized premium, discount and capitalized loan fees, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges (1031 Exchanges) divided by (ii) Adjusted EBITDA for the prior three months, annualized. The Company believes that this ratio is useful because it provides investors with information regarding its total notional debt net of cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges, which could be used to repay debt, compared to its performance as measured using Adjusted EBITDA. Comparison of the Company’s presentation of Net Debt to Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Net Debt and Preferred Stock to Adjusted EBITDA is a supplemental non-GAAP financial measure and represents (i) the Company’s total notional debt, excluding unamortized premium, discount and capitalized loan fees, plus preferred stock, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges divided by (ii) Adjusted EBITDA for the prior three months, annualized. The Company believes that this ratio is useful because it provides investors with information regarding its total notional debt and preferred stock, net of cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges, which could be used to repay debt, compared to its performance as measured using Adjusted EBITDA. Comparison of the Company’s presentation of Net Debt and Preferred Stock to Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
CONTACT INFORMATION
Michael Fitzmaurice
VP – Capital Markets & Investor Relations
Retail Properties of America, Inc.
(630) 634-4233
Retail Properties of America, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except par value amounts)
(unaudited)
March 31, 2017 | December 31, 2016 | |||||||
Assets | ||||||||
Investment properties: | ||||||||
Land | $ | 1,193,803 | $ | 1,191,403 | ||||
Building and other improvements | 4,268,740 | 4,284,664 | ||||||
Developments in progress | 25,515 | 23,439 | ||||||
5,488,058 | 5,499,506 | |||||||
Less accumulated depreciation | (1,440,089 | ) | (1,443,333 | ) | ||||
Net investment properties (includes $86,798 and $0 from consolidated variable interest entities, respectively) | 4,047,969 | 4,056,173 | ||||||
Cash and cash equivalents | 40,274 | 53,119 | ||||||
Accounts and notes receivable (net of allowances of $7,903 and $6,886, respectively) | 71,705 | 78,941 | ||||||
Acquired lease intangible assets, net | 140,980 | 142,015 | ||||||
Assets associated with investment properties held for sale | 38,200 | 30,827 | ||||||
Other assets, net | 127,489 | 91,898 | ||||||
Total assets | $ | 4,466,617 | $ | 4,452,973 | ||||
Liabilities and Equity | ||||||||
Liabilities: | ||||||||
Mortgages payable, net (includes unamortized premium of $1,330 and $1,437, respectively, unamortized discount of $(612) and $(622), respectively, and unamortized capitalized loan fees of $(869) and $(5,026), respectively) | $ | 373,221 | $ | 769,184 | ||||
Unsecured notes payable, net (includes unamortized discount of $(942) and ($971), respectively, and unamortized capitalized loan fees of $(3,771) and $(3,886), respectively) | 695,287 | 695,143 | ||||||
Unsecured term loans, net (includes unamortized capitalized loan fees of $(3,806) and $(2,402), respectively) | 646,194 | 447,598 | ||||||
Unsecured revolving line of credit | 363,000 | 86,000 | ||||||
Accounts payable and accrued expenses | 58,331 | 83,085 | ||||||
Distributions payable | 39,235 | 39,222 | ||||||
Acquired lease intangible liabilities, net | 108,529 | 105,290 | ||||||
Liabilities associated with investment properties held for sale | 1,060 | 864 | ||||||
Other liabilities | 79,279 | 74,501 | ||||||
Total liabilities | 2,364,136 | 2,300,887 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Preferred stock, $0.001 par value, 10,000 shares authorized, 7.00% Series A cumulative redeemable preferred stock, 5,400 shares issued and outstanding as of March 31, 2017 and December 31, 2016; liquidation preference $135,000 | 5 | 5 | ||||||
Class A common stock, $0.001 par value, 475,000 shares authorized, 236,888 and 236,770 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 237 | 237 | ||||||
Additional paid-in capital | 4,927,615 | 4,927,155 | ||||||
Accumulated distributions in excess of earnings | (2,826,730 | ) | (2,776,033 | ) | ||||
Accumulated other comprehensive income | 1,354 | 722 | ||||||
Total equity | 2,102,481 | 2,152,086 | ||||||
Total liabilities and equity | $ | 4,466,617 | $ | 4,452,973 | ||||
Retail Properties of America, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share amounts)
(unaudited)
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Revenues | ||||||||
Rental income | $ | 109,974 | $ | 115,260 | ||||
Tenant recovery income | 30,786 | 30,356 | ||||||
Other property income | 2,933 | 3,023 | ||||||
Total revenues | 143,693 | 148,639 | ||||||
Expenses | ||||||||
Operating expenses | 21,864 | 23,061 | ||||||
Real estate taxes | 21,879 | 19,939 | ||||||
Depreciation and amortization | 53,474 | 53,396 | ||||||
Provision for impairment of investment properties | — | 2,164 | ||||||
General and administrative expenses | 11,213 | 11,406 | ||||||
Total expenses | 108,430 | 109,966 | ||||||
Operating income | 35,263 | 38,673 | ||||||
Gain on extinguishment of debt | — | 13,653 | ||||||
Interest expense | (85,532 | ) | (26,764 | ) | ||||
Other income, net | 5 | 125 | ||||||
(Loss) income from continuing operations | (50,264 | ) | 25,687 | |||||
Gain on sales of investment properties | 41,164 | 21,739 | ||||||
Net (loss) income | (9,100 | ) | 47,426 | |||||
Preferred stock dividends | (2,362 | ) | (2,362 | ) | ||||
Net (loss) income attributable to common shareholders | $ | (11,462 | ) | $ | 45,064 | |||
(Loss) earnings per common share – basic and diluted | ||||||||
Net (loss) income per common share attributable to common shareholders | $ | (0.05 | ) | $ | 0.19 | |||
Weighted average number of common shares outstanding – basic | 236,294 | 236,578 | ||||||
Weighted average number of common shares outstanding – diluted | 236,294 | 236,680 | ||||||
Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands, except per share amounts)
(unaudited)
Funds From Operations (FFO) Attributable to Common Shareholders and
Operating FFO Attributable to Common Shareholders
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Net (loss) income attributable to common shareholders | $ | (11,462 | ) | $ | 45,064 | |||
Depreciation and amortization of depreciable real estate | 53,079 | 53,094 | ||||||
Gain on sales of depreciable investment properties | (41,164 | ) | (21,739 | ) | ||||
FFO attributable to common shareholders | $ | 453 | $ | 76,419 | ||||
FFO attributable to common shareholders per common share outstanding | $ | 0.00 | $ | 0.32 | ||||
FFO attributable to common shareholders | $ | 453 | $ | 76,419 | ||||
Impact on earnings from the early extinguishment of debt, net | 66,357 | (12,846 | ) | |||||
Provision for hedge ineffectiveness | 6 | — | ||||||
Provision for impairment of non-depreciable investment property | — | 2,164 | ||||||
Other (a) | 130 | — | ||||||
Operating FFO attributable to common shareholders | $ | 66,946 | $ | 65,737 | ||||
Operating FFO attributable to common shareholders per common share outstanding | $ | 0.28 | $ | 0.28 | ||||
(a) | Consists of the impact on earnings from actual or anticipated settlement of litigation involving the Company, including associated legal costs, which are included in "Other income, net" in the condensed consolidated statements of operations. |
FFO Attributable to Common Shareholders and Operating FFO Attributable to Common Shareholders Guidance
Per Share Guidance Range Full Year 2017 | ||||||||
Low | High | |||||||
Net income attributable to common shareholders | $ | 0.91 | $ | 0.96 | ||||
Depreciation and amortization of depreciable real estate | 0.84 | 0.84 | ||||||
Provision for impairment of investment properties | — | — | ||||||
Gain on sales of depreciable investment properties | (1.08 | ) | (1.08 | ) | ||||
FFO attributable to common shareholders | $ | 0.67 | $ | 0.72 | ||||
Impact on earnings from the early extinguishment of debt | 0.31 | 0.31 | ||||||
Provision for hedge ineffectiveness | — | — | ||||||
Preferred stock redemption in excess of carrying value | 0.02 | 0.02 | ||||||
Other | — | — | ||||||
Operating FFO attributable to common shareholders | $ | 1.00 | $ | 1.05 | ||||
Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures (continued)
(amounts in thousands)
(unaudited)
Reconciliation of Net (Loss) Income Attributable to Common Shareholders to Same Store NOI
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Net (loss) income attributable to common shareholders | $ | (11,462 | ) | $ | 45,064 | |||
Adjustments to reconcile to Same Store NOI: | ||||||||
Preferred stock dividends | 2,362 | 2,362 | ||||||
Gain on sales of investment properties | (41,164 | ) | (21,739 | ) | ||||
Depreciation and amortization | 53,474 | 53,396 | ||||||
Provision for impairment of investment properties | — | 2,164 | ||||||
General and administrative expenses | 11,213 | 11,406 | ||||||
Gain on extinguishment of debt | — | (13,653 | ) | |||||
Interest expense | 85,532 | 26,764 | ||||||
Straight-line rental income, net | (341 | ) | (1,028 | ) | ||||
Amortization of acquired above and below market lease intangibles, net | (731 | ) | (576 | ) | ||||
Amortization of lease inducements | 323 | 231 | ||||||
Lease termination fees | (1,612 | ) | (1,658 | ) | ||||
Straight-line ground rent expense | 686 | 916 | ||||||
Amortization of acquired ground lease intangibles | (140 | ) | (140 | ) | ||||
Other income, net | (5 | ) | (125 | ) | ||||
NOI | 98,135 | 103,384 | ||||||
NOI from Other Investment Properties | (10,490 | ) | (17,420 | ) | ||||
Same Store NOI | $ | 87,645 | $ | 85,964 | ||||
Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures (continued)
(amounts in thousands, except ratios)
(unaudited)
Reconciliation of Mortgages Payable, Net, Unsecured Notes Payable, Net, Unsecured Term Loans, Net and
Unsecured Revolving Line of Credit to Total Net Debt and Total Net Debt and Preferred Stock
March 31, 2017 | December 31, 2016 | |||||||
Mortgages payable, net | $ | 373,221 | $ | 769,184 | ||||
Unsecured notes payable, net | 695,287 | 695,143 | ||||||
Unsecured term loans, net | 646,194 | 447,598 | ||||||
Unsecured revolving line of credit | 363,000 | 86,000 | ||||||
Total | 2,077,702 | 1,997,925 | ||||||
Mortgage premium, net of accumulated amortization | (1,330 | ) | (1,437 | ) | ||||
Mortgage discount, net of accumulated amortization | 612 | 622 | ||||||
Unsecured notes payable discount, net of accumulated amortization | 942 | 971 | ||||||
Capitalized loan fees, net of accumulated amortization | 8,446 | 11,314 | ||||||
Total notional debt | 2,086,372 | 2,009,395 | ||||||
Less: consolidated cash and cash equivalents | (40,274 | ) | (53,119 | ) | ||||
Less: disposition proceeds temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges | (62,468 | ) | — | |||||
Total net debt | 1,983,630 | 1,956,276 | ||||||
Series A preferred stock | 135,000 | 135,000 | ||||||
Total net debt and preferred stock | $ | 2,118,630 | $ | 2,091,276 | ||||
Net Debt to Adjusted EBITDA (a) | 5.6x | 5.6x | ||||||
Net Debt and Preferred Stock to Adjusted EBITDA (a) | 6.0x | 6.0x | ||||||
Reconciliation of Net (Loss) Income Attributable to Common Shareholders to Adjusted EBITDA
Three Months Ended | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
Net (loss) income attributable to common shareholders | $ | (11,462 | ) | $ | 15,932 | |||
Preferred stock dividends | 2,362 | 2,363 | ||||||
Interest expense | 85,532 | 31,387 | ||||||
Depreciation and amortization | 53,474 | 60,828 | ||||||
Gain on sales of investment properties | (41,164 | ) | (31,970 | ) | ||||
Provision for impairment of investment properties | — | 9,328 | ||||||
Adjusted EBITDA | $ | 88,742 | $ | 87,868 | ||||
Annualized | $ | 354,968 | $ | 351,472 | ||||
(a) | For purposes of these ratio calculations, annualized three months ended figures were used. |