Kite Realty Group Trust (NYSE: KRG) (the “Company”) announced
today its operating results for the fourth quarter and full year
ended December 31, 2016. Financial statements, exhibits, and
reconciliations of non-GAAP measures attached to this release
include the details of the Company’s results.
Fourth Quarter
Highlights
- Net income attributable to common
shareholders was $3.4 million, or $0.04 per diluted common
share.
- Funds From Operations of the Operating
Partnership (“FFO”), as adjusted, was $42.9 million, or $0.50 per
diluted share.
- FFO, as defined by NAREIT, was $42.0
million, or $0.49 per diluted share.
- Same-property Net Operating Income
(“NOI”) increased 3.6% for the comparable operating portfolio, or
4.5% excluding the impact of the Company’s Redevelopment, Repurpose
and Reposition ("3-R") initiative, both percentages compared to the
same period in the prior year.
- The aggregate cash rent spread on
comparable new and renewal leases was 11.5%.
- The Company sold one operating property
in December, generating gross proceeds of approximately $14.6
million.
- Four 3-R projects were completed during
the fourth quarter with costs totaling $8.3 million and a projected
annualized return of 11.3%.
- Ten 3-R projects are currently under
construction with an aggregate cost of approximately $62 million
and an annualized return of approximately 9% - 10%.
- The Company increased its quarterly
common dividend 5.2% to $0.3025 per share (equivalent to $1.21 per
annum).
Full Year Highlights
- Net income attributable to common
shareholders was $1.2 million, or $0.01 per diluted common
share.
- FFO, as adjusted, was $175.8 million,
or $2.06 per diluted share.
- FFO, as defined by NAREIT, was $170.6
million, or $2.00 per diluted share.
- Same-property NOI increased 2.9% for
the comparable operating portfolio, or 3.7% excluding the impact of
the 3-R initiative.
- Leased small shop space increased by
130 basis points to 88.9%.
- The Company completed its inaugural
$300 million public offering of senior unsecured notes.
- Weighted average debt maturities
increased to 6.4 years from 5.2 years at the end of the prior
year.
“We finished a solid fourth quarter and full year 2016,” said
John Kite, Chief Executive Officer. “We executed our inaugural
public debt offering at an attractive 4% coupon. We ended the year
with $430 million of liquidity and only $90 million of debt
maturing through 2020. We generated a 3.6% increase in
same-property NOI for the quarter, or 4.5% excluding the impact of
our 3-R program. Small shop leasing is approaching our 90% goal, as
we increased another 130 basis points from last year. Our
redevelopment efforts are progressing according to plan, as we were
able to successfully complete four projects in the fourth quarter.
By continuing to grow free cash flow, we were able to increase our
quarterly cash dividend another 5.2% at the end of the year. As we
look forward into 2017, we will focus on achieving our long-term
strategic goals and will continue to provide value for our
shareholders.”
Financial & Portfolio
Results
Financial Results
Net income attributable to common shareholders for the three
months ended December 31, 2016, was $3.4 million, compared to net
income of $5.4 million for the same period in 2015. For the twelve
months ended December 31, 2016, net income attributable to common
shareholders was $1.2 million, compared to a net income of $15.4
million for the twelve months ended December 31, 2015. Full year
2016 results include $2.8 million in transaction costs, while 2015
included a gain on debt extinguishment and a gain on settlement
totaling $10.2 million.
For the three months ended December 31, 2016, FFO, as adjusted,
was $42.9 million, or $0.50 per diluted share, compared to $42.4
million, or $0.50 per diluted share, for the same period in the
prior year. For the three months ended December 31, 2016, FFO, as
defined by NAREIT, was $42.0 million, or $0.49 per diluted share,
compared to $49.1 million, or $0.58 per diluted share, for the same
period in the prior year.
For the twelve months ended December 31, 2016, FFO, as adjusted,
was $175.8 million, or $2.06 per diluted share, compared to $170.2
million, or $1.99 per diluted share, for the prior year. For the
twelve months ended December 31, 2016, FFO, as defined by NAREIT,
was $170.6 million, or $2.00 per diluted share, compared to $179.8
million, or $2.11 per diluted share, for the prior year. The
decrease was driven by transaction costs and debt extinguishment
activity.
Portfolio Operations
As of December 31, 2016, the Company owned interests in 121
properties totaling approximately 24 million square feet. The owned
gross leasable area in the Company’s retail operating portfolio was
95.4% leased as of December 31, 2016, and the Company’s overall
portfolio was 95.5% leased, excluding ground leases and non-owned
anchors.
Same-property NOI, which includes 106 operating properties,
increased 3.6% in the fourth quarter compared to the same period in
the prior year, or 4.5% excluding the impact of the 3-R initiative.
Same-property NOI increased 2.9% for the full year (3.7% excluding
3-R properties), compared to the same periods in the prior year.
The leased percentage of properties included in the same-property
pool was 95.3% at December 31, 2016, compared to 95.5% at December
31, 2015.
The Company executed 92 leases totaling 571,090 square feet
during the fourth quarter of 2016. There were 68 comparable new and
renewal leases executed during the quarter for 489,789 square feet.
Cash rent spreads on new and renewal leases executed in the quarter
were approximately 26.3% and 5.5%, respectively, for a blended cash
rent spread of 11.5%. The renewal lease spread includes two anchor
renewals totaling approximately 80,000 square feet that were
renewed at a flat rental rate. Excluding these two leases, the cash
renewal spread was 6.9%.
In December, we completed the sale of one operating property.
The disposition of this asset resulted in gross proceeds of
approximately $14.6 million, which was used to pay down the
Company’s revolving line of credit.
Balance Sheet
The Company continued to strengthen its balance sheet during the
fourth quarter by unencumbering its Geist Pavilion, Colonial
Square, and Village Walk operating properties. As a result, the
ratio of secured debt to undepreciated assets was lowered from
23.0% to 16.9% as of December 31, 2015 and 2016, respectively. As
of year-end, the Company had reduced its term maturities through
2020 to $90 million.
Development and
Redevelopment
The Company began construction on a new $4.5 million development
project at Holly Springs, Phase II. As of year-end, Parkside Town
Commons, Phase II, and Holly Springs, Phase II, were 74.5%
pre-leased or committed with projected costs of $90.6 million, of
which $82.9 million had been incurred.
We completed construction on four 3-R projects during the fourth
quarter, including Hitchcock Plaza (Augusta, GA - Aiken, SC), Shops
at Moore (Oklahoma City, OK), Tarpon Bay Plaza (Naples, FL) and
Traders Point (Indianapolis, IN). The Company invested $8.3 million
into these properties for a projected annualized return of
11.3%.
The Company’s 3-R initiative currently includes ten projects
under various stages of construction with estimated costs of $58.0
to $66.5 million and an estimated combined annualized return
ranging from 9.0% to 10.0%. During the fourth quarter, the Company
commenced construction on two projects at Market Street Village
(Fort Worth, TX) and Phase II of Portofino Shopping Center
(Houston, TX).
2017 Earnings Guidance
The Company is introducing guidance for 2017 FFO, as defined by
NAREIT, in a range of $2.00 to $2.06 per diluted share.
The 2017 earnings guidance is based on the following key
assumptions:
- Increase in same-property NOI of 2.0%
to 3.0% (excluding redevelopment);
- Year-end retail portfolio leased rate
of 95% to 96%;
- Dispositions of operating properties of
$45 million to $55 million;
- General and administrative expense of
$20 million to $22 million;
- GAAP interest expense of $66 million to
$68 million;
- Non-cash below market lease
amortization of $2.5 million to $3.5 million;
- Gain on sale of non-depreciable assets
included in Other Property Related Revenue of $1 million to $3
million; and
- No acquisition activity.
The 2017 earnings guidance is based on a number of factors, many
of which are outside the Company’s control and all of which are
subject to change. The Company may change its guidance during the
year if actual or anticipated results vary from these or other
assumptions, although the Company undertakes no obligation to do
so.
Guidance Range
For Full Year 2017 Low
High Consolidated net income per diluted common share
$ 0.12 $ 0.18 Add: Depreciation,
amortization and other 1.88 1.88
FFO, as defined by NAREIT, per diluted share $
2.00 $ 2.06
Earnings Conference Call
The Company will conduct a conference call to discuss its
financial results on Friday, February 3, 2017, at 11:00 a.m.
Eastern Time. A live webcast of the conference call will be
available online on the Company’s corporate website at
www.kiterealty.com. The dial-in numbers are (844) 309-0605 for
domestic callers and (574) 990-9933 for international callers
(passcode 29547070). In addition, a webcast replay link will be
available on the corporate website.
About Kite Realty Group
Trust
Kite Realty Group Trust is a full-service, vertically integrated
real estate investment trust engaged in the ownership, operation,
management, leasing, acquisition, construction, redevelopment and
development of neighborhood and community shopping centers in
selected markets in the United States. As of December 31, 2016, the
Company owned interests in a portfolio of 121 operating,
development and redevelopment properties totaling approximately 24
million total square feet across 20 states. For more information,
please visit the Company’s website at www.kiterealty.com.
Safe Harbor
This press release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such statements
are based on assumptions and expectations that may not be realized
and are inherently subject to risks, uncertainties and other
factors, many of which cannot be predicted with accuracy and some
of which might not even be anticipated. Future events and actual
results, performance, transactions or achievements, financial or
otherwise, may differ materially from the results, performance,
transactions or achievements, financial or otherwise, expressed or
implied by the forward-looking statements. Risks, uncertainties and
other factors that might cause such differences, some of which
could be material, include, but are not limited to: national and
local economic, business, real estate and other market conditions,
particularly in light of low growth in the U.S. economy, as well as
economic uncertainty caused by fluctuations in the prices of oil
and other energy sources, financing risks, including the
availability of and costs associated with sources of liquidity, the
Company’s ability to refinance, or extend the maturity dates of,
its indebtedness, the level and volatility of interest rates, the
financial stability of tenants, including their ability to pay rent
and the risk of tenant bankruptcies, the competitive environment in
which the Company operates, acquisition, disposition, development,
joint venture, property ownership and management risks, the
Company’s ability to maintain its status as a real estate
investment trust for federal income tax purposes, potential
environmental and other liabilities, impairment in the value of
real estate property the Company owns, risks related to the
geographical concentration of the Company’s properties in Florida,
Indiana and Texas, insurance costs and coverage, risks associated
with cybersecurity attacks and the loss of confidential information
and other business interruptions, the dilutive effects of future
offerings of issuing additional securities, and other factors
affecting the real estate industry generally. The Company refers
you to the documents filed by the Company from time to time with
the SEC, specifically the section titled “Risk Factors” in the
Company’s and the Operating Partnership’s Annual Report on Form
10-K for the year ended December 31, 2015, which discuss these and
other factors that could adversely affect the Company’s results.
The Company undertakes no obligation to publicly update or revise
these forward-looking statements, whether as a result of new
information, future events or otherwise.
Kite Realty Group Trust Consolidated
Balance Sheets (Unaudited) ($ in
thousands) December 31, December 31, 2016
2015 Assets: Investment properties, at cost $
3,996,065 $ 3,933,140 Less: accumulated depreciation (560,683 )
(432,295 ) 3,435,382 3,500,845 Cash and cash equivalents
19,874 33,880 Tenant and other receivables, including accrued
straight-line rent of $28,703 and $23,809 respectively, net of
allowance for uncollectible accounts 53,087 51,101 Restricted cash
and escrow deposits 9,037 13,476 Deferred costs and intangibles,
net 129,264 148,274 Prepaid and other assets 9,727 8,852
Total Assets $ 3,656,371 $ 3,756,428
Liabilities and Shareholders’ Equity: Mortgage and other
indebtedness, net $ 1,731,074 $ 1,724,449 Accounts payable and
accrued expenses 80,664 81,356 Deferred revenue and other
liabilities 112,202 131,559
Total Liabilities
1,923,940 1,937,364 Commitments and contingencies
Limited Partners’ interests in the
Operating Partnership and other redeemable noncontrolling
interests
88,165 92,315
Shareholders’ Equity: Kite Realty Group
Trust Shareholders’ Equity:
Common Shares, $.01 par value, 225,000,000
shares authorized, 83,545,398 and 83,334,865 shares issued and
outstanding at December 31, 2016 and December 31, 2015,
respectively
835 833 Additional paid in capital 2,062,360 2,050,545 Accumulated
other comprehensive loss (316 ) (2,145 ) Accumulated deficit
(419,305 ) (323,257 )
Total Kite Realty Group Trust
Shareholders’ Equity 1,643,574 1,725,976 Noncontrolling
Interests 692 773
Total Equity 1,644,266
1,726,749
Total Liabilities and Shareholders'
Equity $ 3,656,371 $ 3,756,428
Kite Realty Group Trust Consolidated
Statements of Operations For the Three and Twelve Months
Ended December 31, 2016 and 2015 (Unaudited)
($ in thousands, except per share data) Three Months
Ended Twelve Months Ended December 31,
December 31, 2016 2015 2016 2015
Revenue: Minimum rent $ 68,622 $ 67,139 $ 274,059 $ 263,794
Tenant reimbursements 17,791 18,344 70,482 70,235 Other property
related revenue 2,461 3,812 9,581 12,976
Total revenue 88,874 89,295 354,122 347,005
Expenses: Property operating 12,469 13,451 47,923 49,973
Real estate taxes 10,511 11,083 42,838 40,904 General,
administrative, and other 5,375 4,578 20,603 18,709 Transaction
costs — — 2,771 1,550 Non-cash gain from release of assumed earned
liability — (4,832 ) — (4,832 ) Impairment charge — 1,592 — 1,592
Depreciation and amortization 42,939 43,116 174,564
167,312
Total expenses 71,294 68,988
288,699 275,208
Operating income 17,580
20,307 65,423 71,797 Interest expense (17,613 ) (15,437 ) (65,577 )
(56,432 ) Income tax expense of taxable REIT subsidiary (51 ) (52 )
(814 ) (186 ) Non-cash gain on debt extinguishment — 5,645 — 5,645
Gain on settlement — — — 4,520 Other expense, net (75 ) (61 ) (169
) (95 )
Income from continuing operations (159 ) 10,402
(1,137 ) 25,249 Gain on sales of operating properties 4,059
854 4,253 4,066
Net income 3,900 11,256
3,116 29,315 Net income attributable to noncontrolling interests
(541 ) (571 ) (1,933 ) (2,198 ) Dividends on preferred shares —
(1,535 ) — (7,877 ) Non-cash adjustment for redemption of preferred
shares — (3,797 ) — (3,797 )
Net income
attributable to Kite Realty Group Trust common shareholders $
3,359 $ 5,353 $ 1,183 $ 15,443
Income per common share - basic $ 0.04 0.06
0.01 0.19
Income per common share - diluted $
0.04 $ 0.06 $ 0.01 $ 0.18
Weighted average common shares outstanding - basic 83,545,807
83,327,664 83,436,511 83,421,904
Weighted average common shares outstanding - diluted 83,571,663
83,438,844 83,465,500 83,534,381
Cash dividends declared per common share $ 0.3025 $
0.2725 $ 1.1650 $ 1.0900
Kite Realty Group Trust Funds From Operations
For the Three and Twelve Months Ended December 31, 2016 and
2015 (Unaudited) ($ in thousands, except per
share data) Three Months Ended Twelve Months
Ended December 31, December 31, 2016
2015 2016 2015 Funds From Operations
Consolidated net income $ 3,900 $ 11,256 $ 3,116 $ 29,315 Less:
cash dividends on preferred shares — (1,535 ) — (7,877 ) Less:
non-cash adjustment for redemption of preferred shares — (3,797 ) —
(3,797 ) Less: net income attributable to noncontrolling interests
in properties (461 ) (442 ) (1,844 ) (1,854 ) Less: gains on sales
of operating properties (4,059 ) (854 ) (4,253 ) (4,066 ) Add:
impairment charge — 1,592 — 1,592 Add: depreciation and
amortization of consolidated entities, net of noncontrolling
interests 42,670 42,855 173,578 166,509
FFO of the Operating Partnership1 42,050 49,075 170,597 179,822
Less: Limited Partners' interests in FFO (1,164 ) (1,091 ) (3,872 )
(3,789 ) FFO attributable to Kite Realty Group Trust common
shareholders1 $ 40,886 $ 47,984 $ 166,725 $
176,033 FFO, as defined by NAREIT, per share of the
Operating Partnership - basic $ 0.49 $ 0.58 $ 2.00
$ 2.11 FFO, as defined by NAREIT, per share of the
Operating Partnership - diluted $ 0.49 $ 0.58 $ 2.00
$ 2.11 FFO of the Operating Partnership1 $
42,050 $ 49,075 $ 170,597 $ 179,822 Less: gain on settlement — — —
(4,520 ) Add: accelerated amortization of debt issuance costs
(non-cash) — — 1,121 — Add: transaction costs — — 2,771 1,550 Add:
severance charge — — 500 — Add: adjustment for redemption of
preferred shares (non-cash) — 3,797 — 3,797 Less: gain from release
of assumed earnout liability (non-cash) — (4,832 ) — (4,832 ) Add
(less): loss (gain) on debt extinguishment 819 (5,645 ) 819
(5,645 ) FFO, as adjusted, of the Operating Partnership $
42,869 $ 42,395 $ 175,808 $ 170,172
FFO, as adjusted, per share of the Operating Partnership - basic $
0.50 $ 0.50 $ 2.06 $ 2.00 FFO, as
adjusted, per share of the Operating Partnership - diluted $ 0.50
$ 0.50 $ 2.06 $ 1.99 Weighted
average common shares outstanding - basic 83,545,807
83,327,664 83,436,511 83,421,904 Weighted
average common shares outstanding - diluted 83,571,663
83,438,844 83,465,500 83,534,381 Weighted
average common shares and units outstanding - basic 85,488,234
85,235,953 85,374,910 85,219,827
Weighted average common shares and units outstanding - diluted
85,514,090 85,347,133 85,403,899 85,332,303
FFO, as defined by NAREIT, per diluted share
Consolidated net income $ 0.05 $ 0.13 $ 0.04 $ 0.34 Less: cash
dividends on preferred shares — (0.02 ) — (0.09 ) Less: non-cash
adjustment for redemption of preferred shares — (0.04 ) — (0.04 )
Less: net income attributable to noncontrolling interests in
properties (0.01 ) — (0.02 ) (0.02 ) Less: gains on sales of
operating properties (0.05 ) (0.01 ) (0.05 ) (0.05 ) Add:
impairment charge — 0.02 — 0.02 Add: depreciation and amortization
of consolidated entities, net of noncontrolling interests 0.50
0.50 2.03 1.95 FFO, as defined by
NAREIT, of the Operating Partnership per diluted share1 $ 0.49
$ 0.58 $ 2.00 $ 2.11 Less: gain
on settlement $ — $ — $ — $ (0.05 ) Add: accelerated amortization
of debt issuance costs — — 0.01 — Add: transaction costs — — 0.03
0.02 Add: severance charge — — 0.01 — Add: adjustment for
redemption of preferred shares (non-cash) — 0.05 — 0.04 Less: gain
from release of assumed earnout liability (non-cash) — (0.06 ) —
(0.06 ) Add (less): loss (gain) on debt extinguishment 0.01
(0.07 ) 0.01 (0.07 ) FFO, as adjusted, of the Operating
Partnership per diluted share $ 0.50 $ 0.50 $ 2.06
$ 1.99 ____________________ 1 “FFO of the
Operating Partnership" measures 100% of the operating performance
of the Operating Partnership’s real estate properties in which the
Company owns an interest. “FFO attributable to Kite Realty Group
Trust common shareholders” reflects a reduction for the redeemable
noncontrolling weighted average diluted interest in the Operating
Partnership.
Funds from Operations (FFO) is a widely used performance measure
for real estate companies and is provided here as a supplemental
measure of operating performance. We calculate FFO in accordance
with the best practices described in the April 2002 National Policy
Bulletin of the National Association of Real Estate Investment
Trusts (NAREIT), which we refer to as the White Paper. The White
Paper defines FFO as net income (determined in accordance with
generally accepted accounting principles (GAAP)), excluding gains
(or losses) from sales and impairments of depreciated property,
plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures.
Considering the nature of our business as a real estate owner
and operator, we believe that FFO is helpful to investors in
measuring our operational performance because it excludes various
items included in net income that do not relate to or are not
indicative of our operating performance, such as gains or losses
from sales of depreciated property and depreciation and
amortization, which can make periodic and peer analyses of
operating performance more difficult. For informational purposes,
we have also provided FFO adjusted for a severance charge,
accelerated amortization of debt issuance costs, a debt
extinguishment loss and transaction costs in 2016, a non-cash
adjustment for redemption of preferred shares in 2015, a gain on
the resolution of an assumed contingency in 2015, and a gain on
settlement and transaction costs in 2015. We believe this
supplemental information provides a meaningful measure of our
operating performance. We believe our presentation of FFO, as
adjusted, provides investors with another financial measure that
may facilitate comparison of operating performance between periods
and among our peer companies. FFO should not be considered as an
alternative to net income (determined in accordance with GAAP) as
an indicator of our financial performance, is not an alternative to
cash flow from operating activities (determined in accordance with
GAAP) as a measure of our liquidity, and is not indicative of funds
available to satisfy our cash needs, including our ability to make
distributions. Our computation of FFO may not be comparable to FFO
reported by other REITs that do not define the term in accordance
with the current NAREIT definition or that interpret the current
NAREIT definition differently than we do.
Kite Realty Group
Trust Same Property Net Operating Income For the
Three and Twelve Months Ended December 31, 2016 and 2015
(Unaudited) ($ in thousands) Three Months
Ended December 31, Twelve Months Ended December 31,
2016 2015 % Change 2016 2015
% Change Number of properties for the quarter1 106 106
Leased percentage 95.3 % 95.5 % 95.3 % 95.5 %
Economic Occupancy percentage2 93.4 % 92.9 % 93.4 %
92.9 % Minimum rent $ 58,662 $ 57,150 $ 223,471 $ 219,305
Tenant recoveries 16,121 16,566 60,986 61,604 Other income 1,249
1,305 2,426 2,425 76,032 75,021 286,883
283,334 Property operating expenses (9,629 ) (10,237 )
(34,989 ) (37,754 ) Real estate taxes (9,441 ) (9,775 ) (36,564 )
(36,351 ) (19,070 ) (20,012 ) (71,553 ) (74,105 )
Net operating
income - same properties3 $ 56,962
$ 55,009 3.6% $ 215,330
$ 209,229 2.9% Net operating
income - same properties excluding the impact of the 3-R
initiative4 4.5% 3.7%
Reconciliation of Same Property NOI to Most Directly Comparable
GAAP Measure: Net operating income - same properties $ 56,962 $
55,009 $ 215,330 $ 209,229 Net operating income - non-same
activity5 8,932 9,752 48,031 46,899 Other expense, net (126 ) (113
) (983 ) (281 ) General, administrative and other (5,375 ) (4,578 )
(20,603 ) (18,709 ) Transaction costs — — (2,771 ) (1,550 )
Depreciation expense (42,939 ) (43,116 ) (174,564 ) (167,312 )
Non-cash gain from release of assumed earnout liability — 4,832 —
4,832 Impairment charge — (1,592 ) — (1,592 ) Interest expense
(17,613 ) (15,437 ) (65,577 ) (56,432 ) Gain on settlement — — —
4,520 Non-cash gain on debt extinguishment — 5,645 — 5,645 Gains on
sales of operating properties 4,059 854 4,253 4,066 Net income
attributable to noncontrolling interests (541 ) (571 ) (1,933 )
(2,198 ) Dividends on preferred shares — (1,535 ) — (7,877 )
Non-cash adjustment for redemption of preferred shares —
(3,797 ) — (3,797 ) Net income attributable to common
shareholders $ 3,359 $ 5,353 $ 1,183 $ 15,443
____________________ 1 Same property NOI excludes
operating properties in redevelopment as well as office properties
(Thirty South Meridian and Eddy Street Commons). 2 Excludes leases
that are signed but under which tenants have not yet commenced the
payment of cash rent. Calculated as a weighted average based on the
timing of cash rent commencement during the period. 3 Same property
net operating income excludes net gains from outlot sales,
straight-line rent revenue, bad debt expense and recoveries, lease
termination fees, amortization of lease intangibles and significant
prior period expense recoveries and adjustments, if any. 4 See
pages 27 and 28 for further detail of the properties included in
the 3-R initiative. 5 Includes non-cash activity across the
portfolio as well as net operating income from properties not
included in the same property pool.
The Company believes that Net Operating Income ("NOI") is
helpful to investors as a measure of its operating performance
because it excludes various items included in net income that do
not relate to or are not indicative of its operating performance,
such as depreciation and amortization, interest expense, and
impairment, if any. The Company believes that Same Property NOI is
helpful to investors as a measure of its operating performance
because it includes only the NOI of properties that have been owned
for the full period presented, which eliminates disparities in net
income due to the redevelopment, acquisition or disposition of
properties during the particular period presented and thus provides
a more consistent metric for the comparison of the Company's
properties. NOI and Same Property NOI should not, however, be
considered as alternatives to net income (calculated in accordance
with GAAP) as indicators of the Company's financial performance.
The Company’s computation of Same Property NOI may differ from the
methodology used by other REITs, and therefore, may not be
comparable to such other REITs.
When evaluating the properties that are included in the same
property pool, we have established specific criteria for
determining the inclusion of properties acquired or those recently
under development. An acquired property is included in the same
property pool when there is a full quarter of operations in both
years subsequent to the acquisition date. Development and
redevelopment properties are included in the same property pool
twelve months after construction is substantially complete and the
properties have been transferred to the operating portfolio. A
redevelopment property is first excluded from the same property
pool when the execution of a redevelopment plan is likely and we
begin recapturing space from tenants. For the quarter ended
December 31, 2016, we excluded nine redevelopment properties
from the same property pool that met these criteria and were owned
in both comparable periods.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170202006184/en/
Kite Realty Group TrustDan Sink, EVP & CFO,
317-577-5609dsink@kiterealty.com
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