- The Company has received the requisite lender consents for the
modification of its existing $1.3B credit facilities which includes
an immediate waiver of certain financial covenants as well as less
restrictive thresholds thereafter
- Consideration for the aforementioned is temporary partial
collateral with release available beginning 3Q 21 upon satisfying
specified conditions; In addition, the Company is discussing
subsequent measures which, if consummated, further improve its
financial wherewithal
- Leasing volume during the 1H 20 exhibited a healthy 7.0% YOY
increase totaling 2.2M SF while releasing spreads for Tier One
assets increased 6.0% for 2Q 20, reflecting the strongest quarterly
improvement over several years
- Of the 18 adaptive reuse projects currently underway, the
Company has held discussions with the respective tenancy and every
single one remains committed to open albeit seven projects have
been delayed to 4Q 20 or 1H 21 as a result of the COVID-19
pandemic
- A letter of intent was executed for the mixed use redevelopment
of Westminster Mall; In addition to net cash proceeds in excess of
$50M, this joint venture arrangement allows the Company to maintain
a retail component while a nationally recognized development
company delivers multifamily to the site
- Fulventory, the Company’s recently launched last mile
fulfillment initiative, has been met with tenant response which has
surpassed expectations as illustrated by the recent leasing of an
80,000 SF medical logistics, distribution and fulfillment facility
and an inventory clearance facility to a sporting goods retailer,
and discussions are underway with several other existing and
prospective tenants to address portfolio wide fulfillment
solutions
- Subject to shareholder approval, the Company intends to enter
into a reverse share split (1:9) by the end of the year whereby
nine of the existing common shares are to be converted to a single
common share
- The Board of Directors declared the third quarter dividend for
the Company’s preferred shares
Washington Prime Group Inc. (NYSE: WPG) today reported
financial and operating results for the second quarter ended June
30, 2020. As previously announced, and due to the coronavirus
(COVID-19) pandemic, the Company has withdrawn its full-year 2020
guidance issued on February 26, 2020. The Company is not providing
updated guidance at this time.
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Net loss per diluted share
$
(0.43
)
$
(0.09
)
$
(0.41
)
$
(0.12
)
FFO per diluted share
$
(0.04
)
$
0.27
$
0.18
$
0.59
FFO per diluted share, as adjusted
$
0.01
$
0.27
$
0.23
$
0.59
A description of each non-GAAP financial measure and the related
reconciliation to the comparable GAAP financial measure are
provided in this press release.
Second Quarter Financial Results
Net loss attributable to common shareholders for the second
quarter of 2020 was $82.1 million, or $(0.43) per diluted share,
compared to a net loss of $17.3 million, or $(0.09) per diluted
share, a year ago. The year-over-year (YOY) difference relates
primarily to the impacts of temporary property closures and
subsequent tenant lease modifications during the second quarter of
2020 due to the ongoing COVID-19 pandemic resulting in lower
revenue of $62.7 million partially offset by lower recoverable
expenses of $10.5 million. In addition, non-cash impairment charges
of $35.0 million as well as a $5.8 million reduction in gain on
sales of outparcels contributed to the YOY decline. The impairment
charges relate to a $23.8 million write down of the carrying value
of two Tier Two properties and an $11.2 million impairment charge
in connection with extinguishment of a note receivable at a
discounted amount to accelerate repayment.
Funds from Operations (FFO) for the second quarter of 2020 was
$(9.4) million, or $(0.04) per diluted share, which compares to
$61.2 million, or $0.27 per diluted share, during the same quarter
a year ago. The YOY decrease in FFO is primarily attributed to
reductions in comparable net operating income (NOI) of $53.4
million for the portfolio as well as a decrease of $1.0 million in
non-cash straight-line income, both primarily from the negative
impact of COVID-19. Also included in the decrease in FFO during the
second quarter of 2020 is a non-cash impairment charge of $11.2
million associated with the aforementioned note receivable. When
adjusting for the $11.2 million charge, FFO, as adjusted, for the
second quarter of 2020 was $1.8 million, or $0.01 per diluted
share. There were no such adjustments for the same quarter a year
ago.
Business Highlights
Significant Leasing Progress in the Face of COVID-19
Pandemic
- Leasing volume during 1H 20 exhibited a healthy 7.0% YOY
increase totaling 2.2M SF of which approximately 45% of new leasing
volume was attributable to lifestyle tenancy. In fact, illustrating
continued tenant demand of the Company’s town centers during the
height of the pandemic (March, April, May and June), 182 leases
were signed totaling 1.3M SF;
- The aforementioned 2.2M SF leased follows annual leasing volume
of 4.4M SF, 4.2M SF, and 4.0M SF during 2019, 2018 and 2017,
respectively, totaling 14.8M SF since 2017; and
- Recent adaptive reuse store openings include Dunham’s Sports
and WVU Medicine at Morgantown Mall as well as The Mall at
Fairfield Commons and Dayton Mall welcomed Morris Furniture at both
assets.
The Company Maintained Stable Operating Metrics during a
National Crisis while Releasing Spreads the Best in Several
Years
- Releasing spreads for Tier One assets exhibited a robust
increase of 6.0% during the second quarter of 2020, reflecting the
strongest quarterly improvement over several years;
- Upon reopening assets following temporary closures due to
COVID-19, reported comparable sales increased 0.6% YOY for the
month of June;
- As of June 30, 2020, combined Tier One and Open Air occupancy
decreased 110 basis points YOY to 91.9%;
- The Company recently executed a letter of intent for the
development of a mixed use project at Clay Terrace in Carmel,
Indiana which will be comprised of approximately 320 luxury
multifamily rental units; and
- Of the 18 adaptive reuse projects addressed, the Company held
discussions with the respective tenancy and every single one
remains committed to open, albeit seven projects have been delayed
to 4Q 20 or 1H 21.
Net Operating Income Performance Obviously Impacted by
Temporary Asset Closings
- As a result of COVID-19, 2Q 20 Tier One comparable net
operating income (NOI) decreased 53.1% YOY while Open Air
comparable NOI decreased 24.5%, resulting in a combined decrease of
44.6% or $47.5M. This decrease can best be explained by factors
which include a tempered view of the future collection of 2Q 20
rents which continue to be resolved favorably as shown by the most
recent collection data. In addition, the Company upheld a
perspective by which it took into account long term relationships
with tenant partners, both large and small, and their future
vitality at the Company’s assets. Lastly, Washington Prime Group
was adamant about maintaining its assets as the dominant town
center within their respective trade areas via such measures as
holding over 900 community service projects which further
strengthened its position and exceptional leasing during the
pandemic validates this approach;
- The aforementioned decreases include the impact of both
completed and in process COVID-19 related lease modifications as
well as increased bad debt expense associated with bankruptcies,
tenant defaults and deferral collection risk. The above impact was
partially offset by operating expense savings while assets were
closed; and
- The Company has collected approximately 44% of contractual
rental income and associated charges for 2Q 20. This collection
rate is comprised of approximately 38% for enclosed assets and
approximately 61% for Open Air assets. The remaining 56% consists
of 30% which is being finalized via formal deferral agreements or
payments currently due and 26% which has been deemed uncollectible
primarily due to bankruptcies and COVID-19 lease modifications.
Note to date, July collections stand at 71.3% with Enclosed and
Open Air comprising 66.5% and 85.2%, respectively.
Progress, Proactivity and Initiatives Defined the Company
during the COVID-19 Pandemic
- Of the Company’s properties, 43 enclosed assets were
temporarily closed due to COVID-19, all of which were reopened
beginning the end of May to early July. The remaining 56 properties
categorized as Open Air or possessing an open air lifestyle format
remained open to provide essential goods and services to the extent
permitted by law;
- While the Company’s assets were fully or partially closed
during 2Q 20, a concerted effort was underway to ensure a seamless
changeover as reopening occurred. Such efforts included tenant
discussion forums and related collateral material in addition to a
Reopening Processes and Best Practices Manual which served as a
valuable resource for both corporate and field employees;
- Liquidity was boosted as the Company ended 2Q 20 with $144M
cash on hand and estimates its year end unrestricted cash balance
to be between $150M and $175M;
- The Company launched Fulventory (view here), a proprietary
initiative allowing tenants to utilize space within WPG assets for
last mile fulfillment and BOPIS (buy online and pickup in store) as
well as inventory clearance. The initial response has surpassed
expectations and in July 2020, WVU Medicine repurposed a former
80,000 SF Sears location at Morgantown Mall as a logistics,
distribution and fulfillment facility serving the broader WVU
Medicine network. In addition, the Company signed a lease with
DICK'S Sporting Goods for a Warehouse Sale inventory clearance
location at Lake View Plaza, which opened in early August and is
one of five DICK'S Sporting Goods Warehouse Sale stores nationwide.
Several other discussions are underway with both existing and
prospective tenancy in order to address portfolio wide fulfillment
solutions;
- Related to Fulventory and in order to further improve upon
guest convenience, the Company recently introduced Retail-to-Go,
its dedicated curbside pickup program which incorporates both
physical and digital implementation; and
- Such industry leading initiatives as WPG Cares (view here) and
Open for Small Business (view here) have been exemplary with
respect to the Company serving as a community and tenant resource.
For instance, WPG Cares has participated in over 900 community
service projects; Open for Small Business has hosted over 20
webinars attended by several thousand participants; and Well Picked
Goods has benefitted the Company’s tenancy during asset closures
via digital merchandise curation and an in store gift card
promotion as reopening occurs.
Lou Conforti, CEO and Director of Washington Prime Group,
Commentary:
“While the impact of COVID-19 has, of course, temporarily
impacted the Company, my colleagues have exhibited an esprit de
corps which is more than noteworthy. These efforts have manifested
themselves both from a philanthropic and business perspective. For
instance, WPG Cares has performed over 900 community service
projects while Open for Small Business has been at the forefront of
ensuring the survival and subsequent prospering of local
entrepreneurs. These civic measures have not only provided
immediate assistance to those in need, they have further solidified
WPG’s town centers as an integral member of the locales which they
serve.
“While the wellbeing of guests, tenants and employees is of the
utmost concern, what has even been more amazing is the continued
progress of Washington Prime Group during this national crisis.
While I won’t repeat all of the previously mentioned achievements,
the following is a summary of such corporate activities as well as
those financial and operating metrics which deserve attention:
- The Company has received the requisite lender consents for the
modification of its existing $1.3B credit facilities which includes
an immediate waiver of certain financial covenants as well as less
restrictive thresholds thereafter. Consideration for aforementioned
is temporary partial collateral with release available beginning 3Q
21 upon satisfying specified conditions. In addition, the Company
is discussing subsequent measures which, if consummated, further
improve its financial wherewithal;
- Leasing volume during the first six months of 2020 exhibited a
7.0% YOY increase totaling 2.2M SF while releasing spreads for Tier
One assets increased 6.0% in the second quarter of 2020, reflecting
the strongest quarterly improvement over several years;
- A letter of intent was executed as it relates to the mixed use
redevelopment and previously discussed monetization of Westminster
Mall. In addition to net cash proceeds in excess of $50M, this
joint ventures allows WPG to maintain a retail component while a
nationally recognized development company delivers multifamily to
the site;
- Of the 18 adaptive reuse projects we have underway, every
single one of the tenants involved have reaffirmed their commitment
to occupy their respective premises albeit seven have delayed
opening until 4Q 20 or 1H 21 ;
- Last quarter, the Company launched Fulventory, its proprietary
last mile fulfillment initiative and, to date, leases totaling
nearly 120,000 SF of Fulventory space have been executed with
additional leases in various stages of discussion with national
retailers; and
- While I am of the belief the corporate culture of WPG
emphasizes respect, we should always strive to improve and in order
to better address such crucial matters as diversity. In this
regard, WPG has established an Inclusion Committee to execute upon
internal and external recommendations.
“It is important to highlight the cooperation and support of our
credit facility participants and other financial partners. Their
confidence of our operational prowess serves as an endorsement as
we continue our focused mandate via tenant diversification, common
area activation, dynamic events and installations and adaptive
reuse. We now also have the ability to take advantage of distressed
situations where our operational expertise can result in value
creation.
“I’d like to express my sincere appreciation to my colleagues
who have worked tirelessly from both a charitable and professional
standpoint. Their commitment to Washington Prime Group invigorates
me and provides the impetus to continue to grind it out on a daily
basis as we continue to differentiate ourselves from sector
peers.”
Unsecured Debt
As of June 30, 2020, the Company was in the compliance with the
covenants relating to its 2024 senior unsecured notes. With respect
to its unsecured bank debt, the Company recently received requisite
lender consents and expects to close, within the next week, on
amendments to its credit facility and December 2015 term loan which
will provide certain covenant relief through the third quarter of
2021. Based upon these modified covenant requirements, the Company
projects that it will remain in compliance with these revised
financial covenants along with other unsecured debt covenants.
Initially the modification will be partially collateralized by
properties making up approximately half of the Company’s previously
unencumbered net operating income with the Company having the
ability to release the security starting in 3Q 21 if certain
conditions are met. The all-in interest rate, depending on total
leverage levels, will range from LIBOR plus 2.35% to 2.60% with a
LIBOR floor of 50 basis points. The modification does not reduce
the total size of the referenced facilities or change the maturity
dates.
Mortgage Loans
The Company executed an extension on the mortgage note payable
secured by Grand Central Mall, located in Parkersburg, West
Virginia, extending the maturity by one year to July 6, 2021.
The final mortgage note maturing in 2020 involves Port Charlotte
Town Center, in Port Charlotte, Florida, and the Company expects to
execute a short term extension on the mortgage.
Company Plans for a 1-for-9 Reverse Share Split
On August 6, 2020, the Board of Directors authorized a 1-for-9
reverse share split of the Company’s common shares and operating
units which is subject to shareholder approval. Upon shareholder
approval and as a result of the reverse share split, each 9 shares
of the Company's issued and outstanding common stock will be
automatically combined and converted into one issued and
outstanding share of common stock. The Company plans to hold a
special meeting of shareholders to vote on the recommendation
before the end of 2020.
The implementation of the reverse share split is intended to
increase the per share trading price of the Company’s common stock
to fulfill the $1.00 minimum bid price requirement for continued
listing on the New York Stock Exchange.
Board of Directors Declares Quarterly Dividend for Preferred
Shares
On August 6, 2020, the Board of Directors declared a quarterly
cash dividend of $0.4688 per Series H preferred share of beneficial
interest, $0.4297 per Series I preferred share of beneficial
interest, and $0.4563 per Series I-1 preferred unit of Preferred
Limited Partnership Interest. Each of the cash dividends on these
preferred shares and preferred units is payable on October 15, 2020
to shareholders and operating partnership unit holders of record on
September 28, 2020.
As previously announced on April 15, 2020 and due to the
COVID-19 pandemic, the Board decided to temporarily suspend the
quarterly cash dividend for common shares and operating partnership
units throughout the remainder of the year with a potential true up
of the dividend for common shares and operating partnership units
during the fourth quarter of 2020 in order to address the Company’s
REIT taxable income distribution requirements.
Earnings Call and Webcast
The Company will host its quarterly earnings conference call and
an audio webcast on Tuesday, August 11, 2020 at 11:00 a.m. Eastern
Time.
The live webcast will be available in listen-only mode from the
investor relations section of the Company’s website at
www.washingtonprime.com. Listeners can also access the call by
dialing 833.235.7642 (or +647.689.4163 for international callers),
and the participant passcode is 7358694.
A replay of the call will be available on the Company’s website,
or by calling 800.585.8367 (or +1.416.621.4642 for international
callers), passcode is 7358694, beginning on Tuesday, August 11
2020, at approximately 1:00 p.m. Eastern Time through midnight on
Tuesday, August 25, 2020.
Supplemental Information
For additional details on the Company’s results and properties,
please refer to the Supplemental Information report on the investor
relations section of the Company’s website. This release as well as
the supplemental information have been furnished to the Securities
and Exchange Commission (SEC) in a Form 8-K.
About Washington Prime Group
Washington Prime Group Inc. is a retail REIT and a recognized
leader in the ownership, management, acquisition and development of
retail properties. The Company combines a national real estate
portfolio with its expertise across the entire shopping center
sector to increase cash flow through rigorous management of assets
and provide new opportunities to retailers looking for growth
throughout the U.S. Washington Prime Group® is a registered
trademark of the Company. Learn more at
www.washingtonprime.com.
Non-GAAP Financial Measures
This press release includes FFO and NOI, including same property
NOI growth, which are financial performance measures not defined by
generally accepted accounting principles in the United States
(GAAP). Reconciliations of these non-GAAP financial measures to the
most directly comparable GAAP measures are included in this press
release. FFO and comparable NOI growth are financial performance
measures widely used by securities analysts, investors and other
interested parties in the evaluation of REITs. The Company believes
that FFO provides investors with additional information regarding
operating performance and a basis to compare the Company’s
performance with that of other REITs.
The Company uses FFO in addition to net income to report
operating results. We determine FFO based on the definition set
forth by the National Association of Real Estate Investment Trusts
(NAREIT) as net income computed in accordance with GAAP, excluding
real estate related depreciation and amortization, excluding gains
and losses from extraordinary items and cumulative effects of
accounting changes, excluding gains and losses from the sales or
disposals of previously depreciated retail operating properties,
excluding impairment charges of depreciable real estate, plus the
allocable portion of FFO of unconsolidated entities accounted for
under the equity method of accounting based upon economic ownership
interest.
NOI is used by industry analysts, investors and Company
management to measure operating performance of the Company’s
properties. NOI represents total property revenues less property
operating and maintenance expenses. Accordingly, NOI excludes
certain expenses included in the determination of net income such
as corporate general and administrative expense and other indirect
operating expenses, interest expense, impairment charges and
depreciation and amortization expense. These items are excluded
from NOI in order to provide results that are more closely related
to a property’s results of operations. In addition, the Company’s
computation of same property NOI excludes termination income and
income from outparcel sales. The Company also adjusts for other
miscellaneous items in order to enhance the comparability of
results from one period to another. Certain items, such as interest
expense, while included in FFO and net income, do not affect the
operating performance of a real estate asset and are often incurred
at the corporate level as opposed to the property level. As a
result, management uses only those income and expense items that
are incurred at the property level to evaluate a property’s
performance. Real estate asset related depreciation and
amortization, as well as impairment charges, are excluded from NOI
for the same reasons that they are excluded from FFO pursuant to
NAREIT’s definition.
Non-GAAP financial measures have limitations as they do not
include all items of income and expense that affect operations, and
accordingly, should always be considered as supplemental to
financial results presented in accordance with GAAP. Investors
should understand that the Company’s computation of these non-GAAP
measures might not be comparable to similar measures reported by
other REITs and that these non-GAAP measures do not represent cash
flow from operations as defined by GAAP, should not be considered
as alternatives to net income determined in accordance with GAAP as
a measure of operating performance and are not alternatives to cash
flows as a measure of liquidity. Investors are cautioned that items
excluded from these measures are significant components in
understanding and addressing financial performance. Reconciliations
of these measures are included in the press release.
Regulation Fair Disclosure (FD)
The Company routinely posts important information online on the
investor relations section of the corporate website. The Company
uses this website, press releases, SEC filings, conference calls,
presentations and webcasts to disclose material, non-public
information in accordance with Regulation FD. The Company
encourages members of the investment community to monitor these
distribution channels for material disclosures. Any information
accessed through the Company’s website is not incorporated by
reference into, and is not a part of, this document.
Forward-Looking Statements
This news release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995
which represent the current expectations and beliefs of management
of Washington Prime Group Inc. (“WPG”) concerning the proposed
transactions, the anticipated consequences and benefits of the
transactions and the targeted close date for the transactions, and
other future events and their potential effects on WPG, including,
but not limited to, statements relating to anticipated financial
and operating results, the Company’s plans, objectives,
expectations and intentions, cost savings and other statements,
including words such as “anticipate,” “believe,” “confident,”
“plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,”
and other similar expressions. Such statements are based upon the
current beliefs and expectations of WPG’s management, and involve
known and unknown risks, uncertainties, and other factors which may
cause the actual results, performance, or achievements of WPG to be
materially different from future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, without limitation: changes in
asset quality and credit risk; ability to sustain revenue and
earnings growth; changes in political, economic or market
conditions generally and the real estate and capital markets
specifically; the impact of increased competition; the availability
of capital and financing; tenant or joint venture partner(s)
bankruptcies; the failure to increase store occupancy and
same-store operating income; risks associated with the acquisition,
disposition, (re)development, expansion, leasing and management of
properties; changes in market rental rates; trends in the retail
industry; relationships with anchor tenants; risks relating to
joint venture properties; costs of common area maintenance;
competitive market forces; the level and volatility of interest
rates; the rate of revenue increases as compared to expense
increases; the financial stability of tenants within the retail
industry; the restrictions in current financing arrangements or the
failure to comply with such arrangements; the liquidity of real
estate investments; the impact of changes to tax legislation and
WPG’s tax positions; losses associated with closures, failures and
stoppages associated with the spread and proliferation of the
coronavirus (COVID-19) pandemic; to qualify as a real estate
investment trust; the failure to refinance debt at favorable terms
and conditions; loss of key personnel; material changes in the
dividend rates on securities or the ability to pay dividends on
common shares or other securities; possible restrictions on the
ability to operate or dispose of any partially-owned properties;
the failure to achieve earnings/funds from operations targets or
estimates; the failure to achieve projected returns or yields on
(re)development and investment properties (including joint
ventures); expected gains on debt extinguishment; changes in
generally accepted accounting principles or interpretations
thereof; terrorist activities and international hostilities; the
unfavorable resolution of legal or regulatory proceedings; the
impact of future acquisitions and divestitures; assets that may be
subject to impairment charges; significant costs related to
environmental issues; changes in LIBOR reporting practices or the
method in which LIBOR is determined; and other risks and
uncertainties, including those detailed from time to time in WPG’s
statements and periodic reports filed with the Securities and
Exchange Commission, including those described under “Risk
Factors”. The forward-looking statements in this communication are
qualified by these risk factors. Each statement speaks only as of
the date of this press release and WPG undertakes no obligation to
update or revise any forward-looking statements to reflect new
information, subsequent events or circumstances. Actual results may
differ materially from current projections, expectations, and
plans, if any. Investors, potential investors and others should
give careful consideration to these risks and uncertainties.
CONSOLIDATED STATEMENTS OF OPERATIONS Washington Prime
Group Inc. (Unaudited, dollars in thousands, except per
share data) Three Months Ended June 30, Six
Months Ended June 30,
2020
2019
2020
2019
Revenue: Rental income
$
96,050
$
156,230
$
243,283
$
319,503
Other income
2,714
5,204
8,081
10,754
Total revenues
98,764
161,434
251,364
330,257
Expenses: Property operating
(28,109
)
(36,432
)
(65,389
)
(75,861
)
Real estate taxes
(18,437
)
(19,878
)
(38,689
)
(41,992
)
Advertising and promotion
(1,300
)
(2,025
)
(3,104
)
(3,918
)
Total recoverable expenses
(47,846
)
(58,335
)
(107,182
)
(121,771
)
Depreciation and amortization
(55,380
)
(71,816
)
(115,084
)
(138,194
)
General and administrative
(11,350
)
(13,124
)
(23,614
)
(27,249
)
Ground rent
(209
)
(195
)
(331
)
(398
)
Impairment loss
(23,800
)
-
(25,119
)
-
Total operating expenses
(138,585
)
(143,470
)
(271,330
)
(287,612
)
Interest expense, net
(37,445
)
(39,143
)
(76,080
)
(75,973
)
Impairment on note receivable
(11,237
)
-
(11,237
)
-
Gain on disposition of interests in properties, net
437
6,241
27,192
16,231
Income and other taxes
(593
)
(229
)
24
(585
)
Loss from unconsolidated entities, net
(4,754
)
(1,713
)
(5,786
)
(1,761
)
Net loss
(93,413
)
(16,880
)
(85,853
)
(19,443
)
Net loss attributable to noncontrolling interests
(14,871
)
(3,126
)
(14,194
)
(4,022
)
Net loss attributable to the Company
(78,542
)
(13,754
)
(71,659
)
(15,421
)
Less: Preferred share dividends
(3,508
)
(3,508
)
(7,016
)
(7,016
)
Net loss attributable to common shareholders
$
(82,050
)
$
(17,262
)
$
(78,675
)
$
(22,437
)
Loss per common share, basic and diluted
$
(0.43
)
$
(0.09
)
$
(0.41
)
$
(0.12
)
CONSOLIDATED BALANCE SHEETS Washington Prime Group
Inc. (Unaudited, dollars in thousands) June
30, December 31,
2020
2019
Assets: Investment properties at cost
$
5,751,236
$
5,787,126
Construction in progress
173,113
115,280
5,924,349
5,902,406
Less: accumulated depreciation
2,458,488
2,397,736
3,465,861
3,504,670
Cash and cash equivalents
127,019
41,421
Tenant receivables and accrued revenue, net
125,153
82,762
Investment in and advances to unconsolidated entities, at equity
415,174
417,092
Deferred costs and other assets
138,423
205,034
Total assets
$
4,271,630
$
4,250,979
Liabilities: Mortgage notes payable
$
1,107,947
$
1,115,608
Notes payable
709,100
957,566
Unsecured term loans
687,209
686,642
Revolving credit facility
644,716
204,145
Other Indebtedness
84,355
97,601
Accounts payable, accrued expenses, intangibles, and deferred
revenues
257,634
260,904
Distributions payable
3,323
3,252
Cash distributions and losses in unconsolidated entities, at equity
-
15,421
Total liabilities
3,494,284
3,341,139
Redeemable noncontrolling interests
3,265
3,265
Equity: Stockholders' equity Series H Cumulative
Redeemable Preferred Stock
104,251
104,251
Series I Cumulative Redeemable Preferred Stock
98,325
98,325
Common stock
19
19
Capital in excess of par value
1,259,130
1,254,771
Accumulated deficit
(757,985
)
(655,492
)
Accumulated other comprehensive loss
(17,809
)
(5,525
)
Total stockholders' equity
685,931
796,349
Noncontrolling interests
88,150
110,226
Total equity
774,081
906,575
Total liabilities, redeemable noncontrolling interests and
equity
$
4,271,630
$
4,250,979
RECONCILIATION OF FUNDS FROM OPERATIONS Including
Pro-Rata Share of Unconsolidated Properties Washington Prime
Group Inc. (unaudited, dollars in thousands, except per
share data) Three Months EndedJune 30, Six
Months EndedJune 30,
2020
2019
2020
2019
Funds from Operations ("FFO"): Net loss
$
(93,413
)
$
(16,880
)
$
(85,853
)
$
(19,443
)
Less: Preferred dividends and distributions on preferred operating
partnership units
(3,568
)
(3,568
)
(7,136
)
(7,136
)
Real estate depreciation and amortization, including joint venture
impact
63,732
81,691
133,501
157,905
Impairment loss, including (gain) on disposition of interests in
properties, net
23,817
-
(293
)
-
FFO
$
(9,432
)
$
61,243
$
40,219
$
131,326
Adjusted Funds from Operations: FFO
$
(9,432
)
$
61,243
$
40,219
$
131,326
Impairment on note receivable
11,237
-
11,237
-
Adjusted FFO
$
1,805
$
61,243
$
51,456
$
131,326
Weighted average common shares outstanding - diluted
225,027
223,239
224,382
223,040
FFO per diluted share
$
(0.04
)
$
0.27
$
0.18
$
0.59
Total adjustments
$
0.05
$
-
$
0.05
$
-
Adjusted FFO per diluted share
$
0.01
$
0.27
$
0.23
$
0.59
RECONCILIATION OF NET OPERATING INCOME GROWTH FOR COMPARABLE
PROPERTIES Including Pro-Rata Share of Unconsolidated
Properties Washington Prime Group Inc. (unaudited,
dollars in thousands) Three Months Ended June
30, Six Months Ended June 30,
2020
2019
Variance $
2020
2019
Variance $
Reconciliation of Comp NOI to Net
Loss: Net loss
$
(93,413
)
$
(16,880
)
$
(76,533
)
$
(85,853
)
$
(19,443
)
$
(66,410
)
Loss from unconsolidated entities
4,754
1,713
3,041
5,786
1,761
4,025
Income and other taxes
593
229
364
(24
)
585
(609
)
Impairment on note receivable
11,237
-
11,237
11,237
-
11,237
Gain on disposition of interests in properties, net
(437
)
(6,241
)
5,804
(27,192
)
(16,231
)
(10,961
)
Interest expense, net
37,445
39,143
(1,698
)
76,080
75,973
107
Operating (Loss) Income
(39,821
)
17,964
(57,785
)
(19,966
)
42,645
(62,611
)
Depreciation and amortization
55,380
71,816
(16,436
)
115,084
138,194
(23,110
)
Impairment loss
23,800
-
23,800
25,119
-
25,119
General and administrative
11,350
13,124
(1,774
)
23,614
27,249
(3,635
)
Fee income
(1,230
)
(2,680
)
1,450
(3,417
)
(5,427
)
2,010
Management fee allocation
36
80
(44
)
36
84
(48
)
Pro-rata share of unconsolidated joint ventures in comp NOI
10,577
17,372
(6,795
)
27,979
34,824
(6,845
)
Property allocated corporate expense
4,192
4,209
(17
)
8,947
8,333
614
Non-comparable properties and other (1)
1,221
(248
)
1,469
1,221
(1,214
)
2,435
NOI from sold properties
(28
)
(1,295
)
1,267
(75
)
(1,700
)
1,625
Termination income
(27
)
(626
)
599
(106
)
(1,412
)
1,306
Straight-line rents
(128
)
(1,165
)
1,037
1,493
(1,907
)
3,400
Ground lease adjustments for straight-line and fair market value
5
5
-
10
10
-
Fair market value and inducement adjustments to base rents
(1,647
)
(1,487
)
(160
)
(2,631
)
(4,387
)
1,756
Less: Tier 2 and noncore properties (2)
(4,661
)
(10,522
)
5,861
(14,904
)
(22,212
)
7,308
Comparable NOI - Tier 1 and Open Air properties
$
59,019
$
106,547
$
(47,528
)
$
162,404
$
213,080
$
(50,676
)
Comparable NOI percentage change - Tier 1 and Open Air
properties
-44.6
%
-23.8
%
(1) Represents an adjustment to remove the NOI amounts from
properties not owned and operated in all periods presented, certain
non-recurring expenses (such as hurricane related expenses), as
well as material insurance proceeds and other non-recurring income
received in the periods presented. This also includes adjustments
related to the rents from the outparcels sold to Four Corners. (2)
NOI from the Tier 2 and noncore properties held in each period
presented.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200810005807/en/
Lisa A. Indest, CAO & EVP, Finance, 614.887.5844 or
lisa.indest@washingtonprime.com Kimberly A. Green, VP, Investor
Relations & Corporate Communications, 614.887.5647 or
kim.green@washingtonprime.com
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