Ramco-Gershenson Properties Trust (NYSE:RPT) today
announced its financial and operating results for the three and six
months ended June 30, 2017.
SECOND QUARTER FINANCIAL AND OPERATING
RESULTS:
- Net income attributable to common shareholders of $0.05 per
diluted share, compared to $0.32 per diluted share, for the same
period in 2016, reflecting lower gains on land sales during the
second quarter of 2017.
- Operating Funds from Operations (“Operating FFO”) of $0.35 per
diluted share, compared to $0.35 per diluted share for the same
period in 2016.
- Generated same property NOI growth with redevelopment of 1.1%
for the three months ended June 30, 2017, positively impacted by
strong minimum rent growth of 2.9% offset by lower comparable
recovery income and credit adjustments recognized in the same
period in 2016.
- Signed 38 comparable leases encompassing 234,503 square feet at
a positive leasing spread of 7.1% with an average base rent of
$16.53 per square feet.
- Posted portfolio leased occupancy of 93.7%, compared to 95.0%
for the same period in 2016.
“Our second quarter results reflect anticipated
short-term moderation in our operating performance. We are
maintaining same-property NOI and operating FFO guidance for the
year,” said Dennis Gershenson, President and Chief Executive
Officer. “Subsequent to quarter-end we closed, or expect to close
within the next 30 days, an additional $75 million in planned
shopping center dispositions, bringing our year-to-date sales to
$104 million and reducing our rental exposure to the state of
Michigan to less than 22%, in line with our stated goal.”
FINANCIAL RESULTS:
For the three months ended June 30,
2017:
- Net income available to common shareholders of $4.4 million, or
$0.05 per diluted share, compared to $25.7 million, which included
a $19.8 million gain on land sales, or $0.32 per diluted share for
the same period in 2016.
- Funds from Operations (“FFO”) of $30.4 million, or $0.35 per
diluted share, compared to $32.1 million, or $0.36 per diluted
share for the same period in 2016.
- Operating FFO of $31.0 million, or $0.35 per diluted share,
compared to $30.8 million or $0.35 per diluted share for the same
period in 2016.
For the six months ended June 30,
2017:
- Net income available to common shareholders of $15.9 million,
or $0.20 per diluted share, compared to $35.9 million, or $0.45 per
diluted share for the same period in 2016.
- Funds from Operations (“FFO”) of $61.2 million, or $0.69 per
diluted share, compared to $61.8 million, or $0.70 per diluted
share for the same period in 2016.
- Operating FFO of $61.6 million, or $0.70 per diluted share,
compared to $60.4 million or $0.69 per diluted share for the same
period in 2016.
BALANCE SHEET METRICS:
- Net debt to EBITDA of 7.0X, interest coverage of 3.7X, and
fixed charge coverage of 3.0X. Including funds held in escrow of
$26.1 million for two asset sales, net debt to EBITDA would have
been 6.9X.
- Weighted average cost and term of debt of 3.84% and 5.6 years,
respectively.
INVESTMENT ACTIVITY:
Dispositions
Subsequent to quarter-end, the Company sold or placed under
contract four Michigan shopping centers for $69.3 million. The
Company also sold a Walgreen’s Data Center in Mount Prospect,
Illinois for $6.2 million.
The Michigan Properties sold, or placed under contract, are:
Clinton Valley, Sterling Heights, 205,000 square feet anchored
by Hobby Lobby and Office DepotGaines Marketplace, Gaines Township,
60,000 square feet anchored by StaplesNew Towne Plaza, Canton,
193,000 square feet anchored by Kohl’s and JoAnnRoseville Plaza,
Roseville, 77,000 square feet anchored by Marshalls and Dollar
Tree
Year-to-date the Company has sold or placed
under contract to sell, seven non-core properties for a total of
$104.0 million, including six Michigan shopping centers for a total
of $97.8 million.
Redevelopment
At June 30, 2017, the Company's active
redevelopment pipeline consisted of 9 projects with an estimated
total cost of $86.5 million, which are expected to stabilize over
the next two years at a weighted average return on cost of
between 9% - 10%.
The Company’s redevelopment pipeline includes
the following strategic new projects:
- Woodbury Lakes - Woodbury, Minnesota - The
Company finalized plans for the expansion and relocation of H&M
to a strategic 20,000 square foot store and the addition of 44,000
square foot Alamo Drafthouse Cinema. Construction on the
initial phase of this multi-year redevelopment will begin in August
of 2017. The project will also feature a newly designed and
remerchandised Main Street. Woodbury Lakes is the
premier regional retail destination in the eastern Minneapolis/St.
Paul area. The cost of the initial phase of the redevelopment
is estimated at $22.8 million.
- Front Range Village - Fort Collins (Denver MSA),
Colorado - The Company initiated its Phase I site
densification project, which will include 15,000 square feet of
premium service and restaurant space, numerous placemaking
improvements, and a new TruFit fitness center in 28,000 square
feet. Phase I is expected to cost $11.4 million with a projected
stabilization in the second quarter of 2018.
DIVIDEND:
In the second quarter, the Company declared a
regular cash dividend of $0.22 per common share for the period
April 1, 2017 through June 30, 2017 and a Series D convertible
perpetual preferred share dividend of $0.90625 per share for the
same period. The dividends were paid on July 3, 2017 to
shareholders of record as of June 20, 2017.
GUIDANCE:The Company has
affirmed its 2017 Operating FFO guidance of $1.34 to $1.38 per
diluted share and its same-property with redevelopment NOI growth
guidance of 2.5% to 3.5%.
CONFERENCE CALL/WEBCAST:
Ramco-Gershenson Properties Trust will host a
live broadcast of its second quarter conference call on Wednesday,
August 2, 2017 at 1:00 p.m. eastern time, to discuss its
financial and operating results as well as its 2017 guidance.
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) 481-4010, (Conference ID: 15997) through August
9, 2017.
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 premier, national publicly-traded shopping center real estate
investment trust (REIT) based in Farmington Hills, Michigan.
The Company's primary business is the ownership and
management of regional dominant and urban-oriented, infill shopping
centers in key growth markets in the 40 largest metropolitan
markets in the United States. At June 30, 2017, the
Company owned interests in and managed a portfolio of 64 shopping
centers, one property held for sale and two joint venture
properties. At June 30, 2017, the Company's consolidated
portfolio was 93.7% leased. Ramco-Gershenson is a
fully-integrated qualified REIT that is self-administered and
self-managed. For additional information about the Company please
visit www.rgpt.com or follow Ramco-Gershenson on Twitter
@RamcoGershenson and facebook.com/ramcogershenson/.
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.
| |
| |
| RAMCO-GERSHENSON PROPERTIES TRUST |
| CONSOLIDATED BALANCE SHEETS |
| (In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
| |
|
|
|
ASSETS |
|
|
|
|
| Income producing
properties, at cost: |
|
|
|
|
| Land |
|
$ |
415,694 |
|
|
$ |
374,889 |
|
| Buildings
and improvements |
|
1,853,221 |
|
|
1,757,781 |
|
| Less
accumulated depreciation and amortization |
|
(368,292 |
) |
|
(345,204 |
) |
| Income producing
properties, net |
|
1,900,623 |
|
|
1,787,466 |
|
|
Construction in progress and land available for development or
sale |
|
68,853 |
|
|
61,224 |
|
| Real
estate held for sale |
|
13,837 |
|
|
8,776 |
|
| Net real estate |
|
1,983,313 |
|
|
1,857,466 |
|
| Equity investments in
unconsolidated joint ventures |
|
2,798 |
|
|
3,150 |
|
| Cash and cash
equivalents |
|
4,798 |
|
|
3,582 |
|
| Restricted cash and
escrows |
|
31,819 |
|
|
11,144 |
|
| Accounts receivable,
net |
|
25,842 |
|
|
24,016 |
|
| Acquired lease
intangibles, net |
|
76,328 |
|
|
72,424 |
|
| Other assets, net |
|
93,645 |
|
|
89,716 |
|
| TOTAL
ASSETS |
|
$ |
2,218,543 |
|
|
$ |
2,061,498 |
|
| |
|
|
|
|
| LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
| Notes payable, net |
|
1,197,414 |
|
|
1,021,223 |
|
| Capital lease
obligation |
|
1,066 |
|
|
1,066 |
|
| Accounts payable and
accrued expenses |
|
53,982 |
|
|
57,357 |
|
| Acquired lease
intangibles, net |
|
67,237 |
|
|
63,734 |
|
| Other liabilities |
|
6,294 |
|
|
6,800 |
|
| Distributions
payable |
|
19,654 |
|
|
19,627 |
|
| TOTAL
LIABILITIES |
|
1,345,647 |
|
|
1,169,807 |
|
| |
|
|
|
|
| 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), 1,849 shares issued and outstanding as of June 30, 2017
and December 31, 2016 |
|
$ |
92,427 |
|
|
$ |
92,427 |
|
| Common shares of
beneficial interest, $0.01 par, 120,000 shares authorized, 79,345
and 79,272 shares issued and outstanding as of June 30, 2017
and December 31, 2016, respectively |
|
793 |
|
|
793 |
|
| Additional paid-in
capital |
|
1,159,197 |
|
|
1,158,430 |
|
| Accumulated
distributions in excess of net income |
|
(401,179 |
) |
|
(381,912 |
) |
| Accumulated other
comprehensive income |
|
1,074 |
|
|
985 |
|
| TOTAL
SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT |
|
852,312 |
|
|
870,723 |
|
| Noncontrolling
interest |
|
20,584 |
|
|
20,968 |
|
| TOTAL
SHAREHOLDERS' EQUITY |
|
872,896 |
|
|
891,691 |
|
| TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
2,218,543 |
|
|
$ |
2,061,498 |
|
| |
|
| |
|
| RAMCO-GERSHENSON PROPERTIES
TRUST |
|
| CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
| (In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
Six Months |
|
|
|
|
Ended June 30, |
|
Ended June 30, |
|
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
REVENUE |
|
|
|
|
|
|
|
|
|
| Minimum
rent |
|
$ |
50,797 |
|
|
$ |
48,554 |
|
|
$ |
100,234 |
|
|
$ |
96,950 |
|
|
|
Percentage rent |
|
225 |
|
|
138 |
|
|
463 |
|
|
440 |
|
|
| Recovery
income from tenants |
|
14,841 |
|
|
16,032 |
|
|
31,732 |
|
|
32,778 |
|
|
| Other
property income |
|
1,126 |
|
|
914 |
|
|
2,232 |
|
|
1,872 |
|
|
|
Management and other fee income |
|
73 |
|
|
245 |
|
|
226 |
|
|
355 |
|
|
| TOTAL
REVENUE |
|
67,062 |
|
|
65,883 |
|
|
134,887 |
|
|
132,395 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
| Real
estate tax expense |
|
10,730 |
|
|
11,132 |
|
|
21,723 |
|
|
21,441 |
|
|
|
Recoverable operating expense |
|
6,431 |
|
|
6,672 |
|
|
14,039 |
|
|
14,751 |
|
|
|
Non-recoverable operating expense |
|
1,242 |
|
|
564 |
|
|
2,390 |
|
|
1,957 |
|
|
|
Depreciation and amortization |
|
23,335 |
|
|
22,714 |
|
|
46,152 |
|
|
46,561 |
|
|
|
Acquisition costs |
|
— |
|
|
4 |
|
|
— |
|
|
63 |
|
|
| General
and administrative expense |
|
6,372 |
|
|
5,683 |
|
|
12,823 |
|
|
11,288 |
|
|
| Provision
for impairment |
|
820 |
|
|
— |
|
|
6,537 |
|
|
— |
|
|
| TOTAL
EXPENSES |
|
48,930 |
|
|
46,769 |
|
|
103,664 |
|
|
96,061 |
|
|
| |
|
|
|
|
|
|
|
|
|
| OPERATING
INCOME |
|
18,132 |
|
|
19,114 |
|
|
31,223 |
|
|
36,334 |
|
|
| |
|
|
|
|
|
|
|
|
|
| OTHER INCOME
AND EXPENSES |
|
|
|
|
|
|
|
|
|
| Other
expense, net |
|
(424 |
) |
|
198 |
|
|
(735 |
) |
|
(150 |
) |
|
| Gain on
sale of real estate |
|
— |
|
|
19,799 |
|
|
11,375 |
|
|
26,324 |
|
|
| Earnings
from unconsolidated joint ventures |
|
55 |
|
|
109 |
|
|
141 |
|
|
218 |
|
|
| Interest
expense |
|
(11,486 |
) |
|
(11,376 |
) |
|
(22,285 |
) |
|
(22,678 |
) |
|
| Other
gain on unconsolidated joint ventures |
|
— |
|
|
215 |
|
|
— |
|
|
215 |
|
|
| INCOME BEFORE
TAX |
|
6,277 |
|
|
28,059 |
|
|
19,719 |
|
|
40,263 |
|
|
| Income
tax provision |
|
(25 |
) |
|
(39 |
) |
|
(53 |
) |
|
(101 |
) |
|
| |
|
|
|
|
|
|
|
|
|
| NET
INCOME |
|
6,252 |
|
|
28,020 |
|
|
19,666 |
|
|
40,162 |
|
|
| Net
income attributable to noncontrolling partner interest |
|
(147 |
) |
|
(659 |
) |
|
(462 |
) |
|
(956 |
) |
|
| NET INCOME
ATTRIBUTABLE TO RPT |
|
6,105 |
|
|
27,361 |
|
|
19,204 |
|
|
39,206 |
|
|
| Preferred
share dividends |
|
(1,675 |
) |
|
(1,675 |
) |
|
(3,350 |
) |
|
(3,350 |
) |
|
| NET INCOME
AVAILABLE TO COMMON SHAREHOLDERS |
|
$ |
4,430 |
|
|
$ |
25,686 |
|
|
$ |
15,854 |
|
|
$ |
35,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON SHARE |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.05 |
|
|
$ |
0.32 |
|
|
$ |
0.20 |
|
|
$ |
0.45 |
|
|
|
Diluted |
|
$ |
0.05 |
|
|
$ |
0.32 |
|
|
$ |
0.20 |
|
|
$ |
0.45 |
|
|
| |
|
|
|
|
|
|
|
|
|
| WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
Basic |
|
79,344 |
|
|
79,233 |
|
|
79,322 |
|
|
79,214 |
|
|
|
Diluted |
|
79,529 |
|
|
86,027 |
|
|
79,525 |
|
|
79,413 |
|
|
| |
| |
| RAMCO-GERSHENSON PROPERTIES
TRUST |
| FUNDS FROM OPERATIONS |
| (In thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| |
|
|
|
|
|
|
|
| Net income |
$ |
6,252 |
|
|
$ |
28,020 |
|
|
$ |
19,666 |
|
|
$ |
40,162 |
|
| Net income attributable
to noncontrolling partner interest |
(147 |
) |
|
(659 |
) |
|
(462 |
) |
|
(956 |
) |
| Preferred share
dividends |
(1,675 |
) |
|
(1,675 |
) |
|
(3,350 |
) |
|
(3,350 |
) |
| Net income available to
common shareholders |
4,430 |
|
|
25,686 |
|
|
15,854 |
|
|
35,856 |
|
| Adjustments: |
|
|
|
|
|
|
|
| Rental
property depreciation and amortization expense |
23,275 |
|
|
22,671 |
|
|
46,033 |
|
|
46,478 |
|
| Pro-rata
share of real estate depreciation from unconsolidated joint
ventures |
79 |
|
|
81 |
|
|
152 |
|
|
163 |
|
| Gain on
sale of depreciable real estate |
— |
|
|
(18,473 |
) |
|
(11,190 |
) |
|
(24,747 |
) |
| Gain on
sale of joint venture depreciable real estate (1) |
— |
|
|
(26 |
) |
|
— |
|
|
(26 |
) |
| Provision
for impairment on income-producing properties |
820 |
|
|
— |
|
|
6,537 |
|
|
— |
|
| Other
gain on unconsolidated joint ventures (2) |
— |
|
|
(215 |
) |
|
— |
|
|
(215 |
) |
| FFO available
to common shareholders |
28,604 |
|
|
29,724 |
|
|
57,386 |
|
|
57,509 |
|
| |
|
|
|
|
|
|
|
|
Noncontrolling interest in Operating Partnership (1) |
147 |
|
|
659 |
|
|
462 |
|
|
956 |
|
| Preferred
share dividends (assuming conversion) (2) |
1,675 |
|
|
1,675 |
|
|
3,350 |
|
|
3,350 |
|
| FFO available
to common shareholders and dilutive securities |
$ |
30,426 |
|
|
$ |
32,058 |
|
|
$ |
61,198 |
|
|
$ |
61,815 |
|
| |
|
|
|
|
|
|
|
| Gain on
sale of land |
— |
|
|
(1,326 |
) |
|
(185 |
) |
|
(1,577 |
) |
| Severence
expense |
554 |
|
|
80 |
|
|
567 |
|
|
80 |
|
|
Acquisition costs |
— |
|
|
4 |
|
|
— |
|
|
63 |
|
| OPERATING FFO
available to common shareholders and dilutive
securities |
$ |
30,980 |
|
|
$ |
30,816 |
|
|
$ |
61,580 |
|
|
$ |
60,381 |
|
| |
|
|
|
|
|
|
|
| Weighted average common
shares |
79,344 |
|
|
79,233 |
|
|
79,322 |
|
|
79,214 |
|
| Shares issuable upon
conversion of Operating Partnership Units (1) |
1,917 |
|
|
1,936 |
|
|
1,917 |
|
|
1,969 |
|
| Dilutive effect of
restricted stock |
185 |
|
|
206 |
|
|
203 |
|
|
199 |
|
| Shares issuable upon
conversion of preferred shares (2) |
6,685 |
|
|
6,588 |
|
|
6,685 |
|
|
6,588 |
|
| Weighted
average equivalent shares outstanding, diluted |
88,131 |
|
|
87,963 |
|
|
88,127 |
|
|
87,970 |
|
| |
|
|
|
|
|
|
|
| FFO available
to common shareholders and dilutive securities per share,
diluted |
$ |
0.35 |
|
|
$ |
0.36 |
|
|
$ |
0.69 |
|
|
$ |
0.70 |
|
| |
|
|
|
|
|
|
|
| Operating FFO
available to common shareholders and dilutive securities per share,
diluted |
$ |
0.35 |
|
|
$ |
0.35 |
|
|
$ |
0.70 |
|
|
$ |
0.69 |
|
| |
|
|
|
|
|
|
|
| Dividend per common
share |
$ |
0.22 |
|
|
$ |
0.21 |
|
|
$ |
0.44 |
|
|
$ |
0.42 |
|
| Payout ratio -
Operating FFO |
62.9 |
% |
|
60.0 |
% |
|
62.9 |
% |
|
60.9 |
% |
|
|
|
|
|
|
|
|
|
(1) The total noncontrolling interest reflects OP units
convertible 1:1 into common shares.
(2) Series D convertible preferred shares
are paid annual dividends of $6.7 million and are currently
convertible into approximately 6.7 million shares of common stock.
They are dilutive only when earnings or FFO exceed approximately
$0.25 per diluted share per quarter and $1.00 per diluted share per
year. The conversion ratio is subject to adjustment based
upon a number of factors, and such adjustment could affect the
dilutive impact of the Series D convertible preferred shares on FFO
and earning per share in future periods.
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. In addition to FFO
available to common shareholders, we include Operating FFO
available to common shareholders as an additional measure of
financial and operating performance. Operating FFO excludes
acquisition costs and periodic items such as impairment provisions
on land available for development or 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 available to common
shareholders and Operating FFO available to common shareholders
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.
|
|
|
|
| RAMCO-GERSHENSON PROPERTIES
TRUST |
| RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES |
| (amounts in thousands) |
|
|
|
Reconciliation of net income available to common
shareholders to Same Property NOI |
| |
|
|
|
|
|
|
|
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
| Net income available to
common shareholders |
$ |
4,430 |
|
|
$ |
25,686 |
|
|
$ |
15,854 |
|
|
$ |
35,856 |
|
| Preferred
share dividends |
1,675 |
|
|
1,675 |
|
|
3,350 |
|
|
3,350 |
|
| Net
income attributable to noncontrolling partner interest |
147 |
|
|
659 |
|
|
462 |
|
|
956 |
|
| Income
tax provision |
25 |
|
|
39 |
|
|
53 |
|
|
101 |
|
| Interest
expense |
11,486 |
|
|
11,376 |
|
|
22,285 |
|
|
22,678 |
|
| Earnings
from unconsolidated joint ventures |
(55 |
) |
|
(109 |
) |
|
(141 |
) |
|
(218 |
) |
| Gain on
sale of real estate |
— |
|
|
(19,799 |
) |
|
(11,375 |
) |
|
(26,324 |
) |
| Gain on
remeasurment of unconsolidated joint venture |
— |
|
|
(215 |
) |
|
— |
|
|
(215 |
) |
| Other
expense, net |
424 |
|
|
(198 |
) |
|
735 |
|
|
150 |
|
|
Management and other fee income |
(73 |
) |
|
(245 |
) |
|
(226 |
) |
|
(355 |
) |
|
Depreciation and amortization |
23,335 |
|
|
22,714 |
|
|
46,152 |
|
|
46,561 |
|
|
Acquisition costs |
— |
|
|
4 |
|
|
— |
|
|
63 |
|
| General
and administrative expenses |
6,372 |
|
|
5,683 |
|
|
12,823 |
|
|
11,288 |
|
| Provision
for impairment |
820 |
|
|
— |
|
|
6,537 |
|
|
— |
|
|
Amortization of lease inducements |
44 |
|
|
112 |
|
|
88 |
|
|
206 |
|
|
Amortization of acquired above and below market lease intangibles,
net |
(1,149 |
) |
|
(822 |
) |
|
(2,108 |
) |
|
(1,557 |
) |
| Lease
termination fees |
— |
|
|
— |
|
|
(33 |
) |
|
(68 |
) |
|
Straight-line ground rent expense |
70 |
|
|
— |
|
|
141 |
|
|
— |
|
|
Amortization of acquired ground lease intangibles |
6 |
|
|
— |
|
|
12 |
|
|
— |
|
|
Straight-line rental income |
(378 |
) |
|
(331 |
) |
|
(1,188 |
) |
|
(810 |
) |
| NOI |
47,179 |
|
|
46,229 |
|
|
93,421 |
|
|
91,662 |
|
| NOI from
Other Investments |
(3,769 |
) |
|
(3,310 |
) |
|
(6,301 |
) |
|
(6,745 |
) |
| Same Property NOI with
Redevelopment |
43,410 |
|
|
42,919 |
|
|
87,120 |
|
|
84,917 |
|
| NOI from
Redevelopment (1) |
(6,107 |
) |
|
(5,186 |
) |
|
(11,995 |
) |
|
(10,528 |
) |
| Same Property NOI
without Redevelopment |
$ |
37,303 |
|
|
$ |
37,733 |
|
|
$ |
75,125 |
|
|
$ |
74,389 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) The NOI from Redevelopment adjustments represent
100% of the NOI related to Deerfield Towne Center, Hunter’s Square,
Woodbury Lakes and West Oaks, and a portion of the NOI
related to specific GLA at Spring Meadows, The Shoppes at Fox River
II, The Shops on Lane Avenue, Mission Bay, River City Marketplace,
and Town & Country for the periods presented. Because of
the redevelopment activity, the center or specific space is not
considered comparable for the periods presented and adjusted out of
Same Property NOI with Redevelopment in arriving at Same Property
NOI without Redevelopment. |
| |
|
|
|
|
|
|
|
| |
| RAMCO-GERSHENSON PROPERTIES TRUST |
| RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES |
| (amounts in thousands) |
| |
| |
Three Months Ended June 30, |
| |
2017 |
|
2016 |
| Reconciliation
of net income to proforma adjusted EBITDA |
|
|
|
| Net income |
$ |
6,252 |
|
|
$ |
28,020 |
|
| Gain on sale of real
estate |
— |
|
|
(19,799 |
) |
| Depreciation and
amortization |
23,335 |
|
|
22,714 |
|
| Provision for
impairment |
820 |
|
|
— |
|
| Severance expense |
554 |
|
|
80 |
|
| (Gain) on sale of joint
venture real estate |
— |
|
|
(26 |
) |
| Gain on remeasurement
of unconsolidated joint ventures |
— |
|
|
(215 |
) |
| Interest expense |
11,486 |
|
|
11,376 |
|
| Income tax
provision |
25 |
|
|
39 |
|
| Acquisition costs |
— |
|
|
4 |
|
| Adjusted EBITDA |
42,472 |
|
|
42,193 |
|
| Proforma adjustments
(1) |
— |
|
|
(1,461 |
) |
| Proforma adjusted
EBITDA |
$ |
42,472 |
|
|
$ |
40,732 |
|
| Annualized proforma
adjusted EBITDA |
$ |
169,888 |
|
|
$ |
162,928 |
|
| |
|
|
|
| |
|
|
|
| Reconciliation
of Notes Payable, net to Net Debt |
|
|
|
| Notes payable, net |
$ |
1,197,414 |
|
|
$ |
1,026,418 |
|
| Unamortized
premium |
(4,537 |
) |
|
(6,025 |
) |
| Deferred financing
costs, net |
3,379 |
|
|
3,777 |
|
| Notional debt |
1,196,256 |
|
|
1,024,170 |
|
| Capital lease
obligation |
1,066 |
|
|
1,108 |
|
| Cash and cash
equivalents |
(4,798 |
) |
|
(4,369 |
) |
| Net debt |
$ |
1,192,524 |
|
|
$ |
1,020,909 |
|
| |
|
|
|
| |
|
|
|
| Reconciliation
of interest expense to total fixed charges |
|
|
|
| Interest expense |
$ |
11,486 |
|
|
$ |
11,376 |
|
| Preferred share
dividends |
1,675 |
|
|
1,675 |
|
| Scheduled mortgage
principal payments |
782 |
|
|
915 |
|
| Total fixed
charges |
$ |
13,943 |
|
|
$ |
13,966 |
|
| |
|
|
|
| |
|
|
|
| Net debt to annualized
proforma adjusted EBITDA(2) |
|
7.0X |
|
|
|
6.3X |
|
| Interest coverage ratio
(Adjusted EBITDA / interest expense) |
|
3.7X |
|
|
|
3.7X |
|
| Fixed
charge coverage ratio (Adjusted EBITDA / fixed charges) |
|
3.0X |
|
|
|
3.0X |
|
| |
|
|
|
| (1) 2Q16 excludes EBITDA of $1.0 million from
dispositions and approximately $0.5 million of insurance settlement
proceeds and miscellaneous income. The proforma adjustments treat
the activity as if they occurred at the start of each quarter. |
| (2) 2Q17 does not include $26.1 million of disposition
proceeds deposited in a 1031 escrow account at June 30, 2017.
The consolidated net debt to annualized proforma adjusted EBITDA
would have been 6.9X after adjusting for the $26.1 million. |
| |
| |
Ramco-Gershenson Properties
TrustNon-GAAP Financial DefinitionsJune
30, 2017
|
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
Certain of our key performance indicators are
considered non-GAAP financial measures. Management uses these
measures along with our GAAP financial statements in order to
evaluate our operations results. We believe these additional
measures provide users of our financial information additional
comparable indicators of our industry, as well as our
performance.
Funds From Operations (FFO) Available to
Common Shareholders
As defined by the National Association of Real
Estate Investment Trusts (NAREIT), Funds From Operations (FFO)
represents net income computed in accordance with generally
accepted accounting principles, excluding gains (or losses) from
sales of depreciable property and 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. We have adopted the NAREIT definition in our
computation of FFO available to common shareholders.
Operating FFO Available to Common
Shareholders
In addition to FFO available to common
shareholders, we include Operating FFO available to common
shareholders as an additional measure of our financial and
operating performance. Operating FFO excludes acquisition
costs and periodic items such as gains (or losses) from sales of
land and impairment provisions on land available for development or
sale, bargain purchase gains, severance expense, accelerated
amortization of debt premiums 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 available to common
shareholders and Operating FFO available to common shareholders
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. We
recognize the limitations of FFO and
Operating FFO when compared to GAAP net
income available to common shareholders. FFO and Operating
FFO available to common shareholders do not represent amounts
available for needed capital replacement or expansion, debt service
obligations, or other commitments and uncertainties. In addition,
FFO and Operating FFO do not represent cash generated from
operating activities in accordance with GAAP and are not
necessarily indicative of cash available to fund cash needs,
including the payment of dividends. FFO and Operating FFO are
simply used as additional indicators of our operating
performance.
Adjusted EBITDA/Proforma Adjusted
EBITDA
Adjusted EBITDA is net income or loss plus
depreciation and amortization, net interest expense, severance
expense, income taxes, gain or loss on sale of real estate, and
impairments of real estate, if any. Adjusted EBITDA should
not be considered an alternative measure of operating results or
cash flow from operations as determined in accordance with
GAAP. Proforma Adjusted EBITDA further adjusts for the effect
of the acquisition or disposition of properties during the
period.
Same Property Operating
Income
Same Property Operating Income ("Same Property
NOI with Redevelopment") is a supplemental non-GAAP financial
measure of real estate companies' operating performance. Same
Property NOI with Redevelopment is considered by management to be a
relevant performance measure of our operations because it includes
only the NOI of comparable properties for the reporting
period. Same Property NOI with Redevelopment excludes
acquisitions and dispositions. Same Property NOI with
Redevelopment is calculated using consolidated operating income and
adjusted to exclude management and other fee income, depreciation
and amortization, general and administrative expense, provision for
impairment and non-comparable income/expense adjustments such as
straight-line rents, lease termination fees, above/below market
rents, and other non-comparable operating income and expense
adjustments.
In addition to Same Property NOI with
Redevelopment, the Company also believes Same Property NOI without
Redevelopment to be a relevant performance measure of our
operations. Same Property NOI without Redevelopment follows
the same methodology as Same Property NOI with Redevelopment,
however it excludes redevelopment activity that significantly
impacts the entire property, as well as lesser redevelopment
activity where we are adding GLA or retenanting a specific
space. A property is designated as redevelopment when
projected costs exceed $1.0 million, and the construction impacts
approximately 20% or more of the income producing property's gross
leasable area ("GLA") or the location and nature of the
construction significantly impacts or disrupts the daily operations
of the property. Redevelopment may also include a portion of
certain properties designated as same property for which we are
adding additional GLA or retenanting space.
Same Property NOI should not be considered an
alternative to net income in accordance with GAAP or as a measure
of liquidity. Our method of calculating Same Property NOI may
differ from methods used by other REITs and, accordingly, may not
be comparable to such other REITs.
Company Contact:
Dawn L. Hendershot, Senior Vice President Investor Relations and Public Affairs
31500 Northwestern Highway, Suite 300
Farmington Hills, MI 48334
dhendershot@rgpt.com
(248) 592-6202
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