Highlights:
- The Company has collected 87% of 3Q 20 rental income and
associated charges adjusted for the applicable impact of COVID-19
lease amendments and related rent concessions;
- Notwithstanding a challenging retail landscape as a result
of the COVID-19 pandemic, year-to-date leasing volume exhibited a
7.0% YOY increase totaling 3.4M SF and 47% of new leasing volume
was attributable to lifestyle tenancy;
- The Company successfully executed amendments to its credit
facilities during 3Q 20, which provides certain covenant relief
through the third quarter of 2021;
- The Company is actively negotiating specific measures with
existing debt investors that would result in deleveraging of its
balance sheet if execution is successful;
- The Company ended 3Q 20 with $112M cash on hand;
- As previously announced and subject to common shareholder
approval, the Company intends to enter into a reverse common 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;
and
- The Board of Directors declared the fourth quarter dividend
for the Company’s preferred shares.
Washington Prime Group Inc. (NYSE: WPG) today reported
financial and operating results for the third quarter ended
September 30, 2020. As previously announced, and due to the
uncertain conditions resulting from the coronavirus (COVID-19)
pandemic, the Company withdrew its full-year 2020 earnings guidance
issued on February 26, 2020.
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Net loss per diluted share
$(0.23)
$(0.02)
$(0.64)
$(0.14)
FFO per diluted share
$0.07
$0.45
$0.25
$1.04
FFO per diluted share, as adjusted
$0.07
$0.28
$0.30
$0.86
A description of each non-GAAP financial measure and the related
reconciliations to the comparable GAAP financial measure are
provided in this press release.
Third Quarter Financial Results
Net loss attributable to common shareholders for the third
quarter of 2020 was $43.7 million, or $(0.23) per diluted share,
compared to a net loss of $4.4 million, or $(0.02) per diluted
share, a year ago. The year-over-year (YOY) difference relates
primarily to the significant impacts of tenant lease modifications
and increased bad debt expense related to delinquent receivables
during the third quarter of 2020 due to the ongoing COVID-19
pandemic resulting in lower YOY revenue of $37.5 million partially
offset by lower recoverable operating expenses of $2.9 million.
Results for the third quarter of 2020 include a non-cash impairment
loss of $1.1 million, which compares to $28.9 million of such
charges in the same quarter a year ago. Other items contributing to
the YOY change include a reduction in gain on sales of outparcels
of $8.2 million, compared to the same quarter a year ago.
Funds from Operations (FFO) for the third quarter of 2020 was
$16.6 million, or $0.07 per diluted share, which compares to $100.9
million, or $0.45 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 $41.5 million for the
portfolio as well as a decrease of $0.4 million in non-cash
straight-line income, both primarily from the negative impact of
COVID-19. Included in FFO during the third quarter of 2019 is a
gain on extinguishment of debt of $38.9 million. When adjusting for
this gain, FFO, as adjusted, for the third quarter of 2019 was
$62.0 million, or $0.28 per diluted share. There was no such gain
during the third quarter of 2020.
Business Highlights
Continued Leasing Strength in the Face of the COVID-19
Pandemic
- Year-to-date leasing volume through September 30, 2020
exhibited a 7.0% YOY increase totaling 3.4M SF;
- During the COVID-19 pandemic, between March and September, 486
leases were signed totaling 2.5M SF;
- 47% of new leasing volume year-to-date was attributable to
lifestyle tenancy which includes food, beverage, entertainment,
home furnishings, fitness, and professional services;
- The aforementioned 3.4M SF year-to-date follows annual leasing
volume of 4.4M SF, 4.2M SF, and 4.0M SF during 2019, 2018 and 2017,
respectively, totaling 16.0M SF since 2017; and
- Year-to-date adaptive reuse openings include: Dunham’s Sports,
WVU Medicine and Ollie’s Bargain Outlet at Morgantown Mall;
Dunham’s Sports at Markland Mall; Morris Furniture at both The Mall
at Fairfield Commons and Dayton Mall; and FieldhouseUSA at The
Outlet Collection™ | Seattle.
Relatively Stable Operating Metrics when Considering the
National Crisis
- New releasing spreads for Tier One assets exhibited an increase
of 1.6% for the twelve months ended September 30, 2020;
- Releasing spreads for combined Tier One and Open Air assets
decreased 3.1% for the twelve months ended September 30, 2020, with
2.8% of the decline attributable to rent concessions for renewals
completed in response to the COVID-19 pandemic;
- As of September 30, 2020, combined Tier One and Open Air
occupancy decreased 230 basis points YOY to 91.2%,
- Reported YOY comparable sales decreased 8% for 3Q 20 albeit
ending on a positive note with an increase of 2% during the month
of September for Tier One assets; and
- Traffic trends have exhibited steady weekly sequential
improvement since reopening in June notwithstanding a leveling off
during July, followed by improvement in August and September with a
subsequent tempering during October.
Net Operating Income Performance and Rent Collection Rate
Shows Improvement from 2Q 20
- As a result of the COVID-19 pandemic, 3Q 20 Tier One comparable
NOI decreased 41.4% YOY while Open Air comparable NOI decreased
13.6%, resulting in a combined decrease of 32.6% or $35.0M. Both
Open Air and Tier One properties showed a sequential improvement in
NOI trends from the previous quarter decrease of 53.1% for Tier
One, 24.5% for Open Air and a combined decrease of 44.6%. This
decrease can best be explained by factors which include a cautious
view of the future collection of outstanding pandemic related
rental income including temporarily moving to cash basis revenue
recognition relating to the Company’s national theater tenancy in
3Q 20 ($8M), the impact of rental relief including moving to
percentage rent structures for certain tenants ($3M), the impact
from 2Q 20 and 3Q 20 bankruptcies ($6M), and reserving for credit
risk tenants that are materially delinquent on payments ($13M). The
decrease includes the impact of both completed and in process
COVID-19 related lease modifications;
- For 3Q 20, the Company has collected approximately 87% of
rental income and associated charges adjusted for the applicable
impact of COVID-19 lease amendments and related rent concessions,
which is an improvement from the 52% of contractual rental income
and associated charges without lease amendments collected during 2Q
20. The collection rate for 3Q 20 is comprised of approximately 84%
for enclosed assets and approximately 95% for Open Air assets based
on the applicable impact of COVID-19 lease amendments and related
rent concessions; and
- For 4Q 20, the Company anticipates a decrease in comparable NOI
between 10% and 20% which would represent improvement from the
previous two quarters’ performance. This assumes that the Company’s
properties remain open throughout the fourth quarter and are not
significantly impacted by any future government-mandated operating
restrictions.
Progress, Proactivity and Initiatives Continued to Define the
Company during the COVID-19 Pandemic
- While all of the Company’s assets have reopened, the Company
realizes that future temporary closures may be necessary in
response to an uptick in COVID-19 cases and government
mandates;
- While the Company’s assets were fully or partially closed, a
concerted effort focused upon safe reopening and included a best
practices manual, tenant discussion forums and the launch of
Retail-to-Go curbside pickup services;
- Fulventory, the Company’s last mile fulfilment 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, an inventory
clearance facility to a sporting goods retailer and several letters
of intent and ongoing discussions with existing and prospective
tenants to address portfolio wide fulfillment solutions; and
- Such industry leading initiatives as WPG Cares and Open for
Small Business have been exemplary with respect to the Company
serving as a community and tenant resource. For instance, WPG Cares
has participated in over 1,000 community service projects; Open for
Small Business has hosted over 25 webinars attended by several
thousand participants; and Well Picked Goods benefitted the
Company’s tenancy during asset closures via digital merchandise
curation and an in store gift card promotion as reopening
occurs.
Department Store Adaptive Reuse and Mixed Use
Progress
- 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 are delayed to 4Q
20 or 1H 21;
- As of September 30, 2020, the Company has resolved 18, or 64%,
of the 28 department stores of which the Company has control;
- As exhibited within the most recent 3Q 20 supplemental, the
Company continues to provide real time updates relating to the 30
department stores within its Tier One and Open Air assets
identified for repositioning (excluding space owned by third
parties such as Seritage Growth Properties). As of September 30,
2020, only two of these department store spaces remained occupied
by Sears;
- Clay Terrace, Carmel, Indiana: Planning continues for mixed
uses, including multifamily rental units, as well as a lifestyle
hotel, new office space, and space intended for lifestyle, food and
beverage uses;
- WestShore Plaza, Tampa, Florida: As the Company continues the
process of obtaining necessary entitlements regarding a mixed use
redevelopment replacing the Sears site at the property, a letter of
intent was executed with a third party developer to add residential
units, office space, and a potential hotel to this parcel;
- Westminster Mall, Westminster, California: A purchase and sale
agreement was executed as it relates to the mixed use redevelopment
and previously discussed monetization of Westminster Mall. The
planned sale of this property will result in excess of $50M in net
cash proceeds; and
- In addition to the aforementioned, the Company has identified
eight assets which are suitable for mixed use redevelopment and it
is estimated these assets could result in multifamily densification
totaling over 4,000 units as well as a host of other nonretail
uses. Discussions at various stages are underway with
municipalities to achieve zoning entitlements as well as financial
and strategic partners to execute upon these value add mixed use
projects.
Lou Conforti, CEO and Director of Washington Prime Group,
Commentary:
“There can be no denying the COVID-19 pandemic has resulted in a
set of new challenges for an already beleaguered retail sector.
Notwithstanding, ever since joining Washington Prime Group, my
objective has been straightforward: Provide Middle America whether
it be Oklahoma City, Oahu, Albuquerque or Columbus with relevant
goods and services via our dominant town center proposition. I
emphasize Middle America as it is this demographic constituency
which has been largely ignored. It became crystal clear we couldn’t
sit on our hands waiting for the usual suspects to lease our space.
Nor were we going to regain our guests’ respect by superficial and
patronizing measures. It was going to require a fundamental shift
as to how WPG regards its role as landlord. By this I mean
proactive operator by diversifying tenancy, activating common area
and delivering relevant adaptive reuse projects.
“Then the COVID-19 pandemic reared its ugly head.
“While it was certainly one heck of a blow, it's not a knockout
punch and it actually strengthened our Company’s conviction about
the midsize cities where our assets are primarily situated. While
we have previously substantiated the relative vibrancy of these
trade areas, there is a growing perspective which I believe will
serve as a catalyst for midsize cities which possess robust
commercial, educational and cultural infrastructures. While it’s
certainly not an easy task, WPG believes our reimagined assets are
an integral part of this proposition.”
Unsecured Indebtedness and Liquidity
On August 17, 2020, the Company announced it entered into
amendments with respect to its credit facilities, which will
provide certain covenant relief through the third quarter of 2021
(the “Amendments”), further strengthening and supporting the
Company’s execution of its long term business plan.
The Amendments 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 the third quarter of
2021 if certain financial 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
Company was in compliance with all applicable covenants as of the
end of most recently completed fiscal quarter that ended September
30, 2020.
Additionally, the Company is actively working on measures with
existing debt investors that would result in deleveraging of its
balance sheet if execution is successful. When considering the
amended financial covenant requirements and the positive impact
from the potential deleveraging measures described above, the
Company projects, based upon internal estimates that it will remain
in compliance with these revised financial covenants along with
other unsecured debt covenants. However, with the continued
uncertainty caused by the COVID-19 pandemic, significant risks
remain and any material adverse effect on our income and expenses
could impact our ability to maintain compliance with our credit
facility and bond covenants. Additionally, there can be no
assurances of the terms or conditions that any such deleveraging
transaction would include or that the Company will be able to
consummate such transaction on a timely basis, or at all.
The Company ended 3Q 20 with $112M cash on hand and estimates
its year end cash balance will be between $125M to $135M.
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
As previously announced, 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 common
shareholder approval. Upon common 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 virtual special meeting of
common shareholders on December 17, 2020 to vote upon a proposal
regarding the reverse share split.
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 November 5, 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 January 15, 2021
to preferred shareholders and operating partnership unit holders of
record on December 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. The Board of Directors
will revisit the dividend policy for common shares and operating
partnership units in early 2021 based on 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 Friday, November 6, 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 6327958.
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 6327958, beginning on Friday, November 6
2020, at approximately 1:00 p.m. Eastern Time through midnight on
Friday, November 20, 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, future liquidity, 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; failure
of the contemplated reverse share split to accomplish the Company’s
objectives for the action and such other adverse consequences on
the marketability and liquidity of the Company’s common stock; 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 EndedSeptember 30,
Nine Months EndedSeptember 30,
2020
2019
2020
2019
Revenue: Rental income
$ 120,138
$ 154,611
$ 363,421
$ 474,114
Other income
3,544
6,593
11,625
17,347
Total revenues
123,682
161,204
375,046
491,461
Expenses: Property operating
(36,067)
(39,007)
(101,456)
(114,868)
Real estate taxes
(19,611)
(19,014)
(58,300)
(61,006)
Advertising and promotion
(1,811)
(2,323)
(4,915)
(6,241)
Total recoverable expenses
(57,489)
(60,344)
(164,671)
(182,115)
Depreciation and amortization
(58,063)
(70,948)
(173,147)
(209,142)
General and administrative
(11,107)
(12,210)
(34,721)
(39,459)
Ground rent
(243)
(215)
(574)
(613)
Impairment loss
(1,067)
(28,936)
(26,186)
(28,936)
Total operating expenses
(127,969)
(172,653)
(399,299)
(460,265)
Interest expense, net
(39,725)
(38,833)
(115,805)
(114,806)
Impairment on note receivable
-
-
(11,237)
-
Gain on disposition of interests in properties, net
1,620
9,825
28,812
26,056
Gain on extinguishment of debt, net
-
38,913
-
38,913
Income and other taxes
(154)
120
(130)
(465)
Loss from unconsolidated entities, net
(5,515)
(241)
(11,301)
(2,002)
Net loss
(48,061)
(1,665)
(133,914)
(21,108)
Net loss attributable to noncontrolling interests
(7,832)
(752)
(22,026)
(4,774)
Net loss attributable to the Company
(40,229)
(913)
(111,888)
(16,334)
Less: Preferred share dividends
(3,508)
(3,508)
(10,524)
(10,524)
Net loss attributable to common shareholders
$ (43,737)
$ (4,421)
$ (122,412)
$ (26,858)
Loss per common share, basic and diluted
$ (0.23)
$ (0.02)
$ (0.64)
$ (0.14)
CONSOLIDATED BALANCE SHEETS Washington Prime Group
Inc. (Unaudited, dollars in thousands)
September 30,
December 31,
2020
2019
Assets: Investment properties at cost
$ 5,777,708
$ 5,787,126
Construction in progress
177,895
115,280
5,955,603
5,902,406
Less: accumulated depreciation
2,499,937
2,397,736
3,455,666
3,504,670
Cash and cash equivalents
95,328
41,421
Tenant receivables and accrued revenue, net
119,472
82,762
Investment in and advances to unconsolidated entities, at equity
411,923
417,092
Deferred costs and other assets
135,182
205,034
Total assets
$ 4,217,571
$ 4,250,979
Liabilities: Mortgage notes payable
$ 1,104,800
$ 1,115,608
Notes payable
709,785
957,566
Term loans
683,475
686,642
Revolving credit facility
641,874
204,145
Other Indebtedness
86,062
97,601
Accounts payable, accrued expenses, intangibles, and deferred
revenues
257,252
260,904
Distributions payable
3,323
3,252
Cash distributions and losses in unconsolidated entities, at equity
-
15,421
Total liabilities
3,486,571
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
1,260,677
1,254,771
Accumulated deficit
(801,722)
(655,492)
Accumulated other comprehensive loss
(14,885)
(5,525)
Total stockholders' equity
646,665
796,349
Noncontrolling interests
81,070
110,226
Total equity
727,735
906,575
Total liabilities, redeemable noncontrolling interests and
equity
$ 4,217,571
$ 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 EndedSeptember 30,
Nine Months EndedSeptember 30,
2020
2019
2020
2019
Funds from Operations ("FFO"): Net loss
$ (48,061)
$ (1,665)
$ (133,914)
$ (21,108)
Less: Preferred dividends and distributions on preferred operating
partnership units
(3,568)
(3,568)
(10,704)
(10,704)
Real estate depreciation and amortization, including joint venture
impact
67,183
81,155
200,684
239,060
Impairment loss, including (gain) on disposition of interests in
properties, net
1,067
24,992
774
24,992
FFO
$ 16,621
$ 100,914
$ 56,840
$ 232,240
Adjusted Funds from Operations: FFO
$ 16,621
$ 100,914
$ 56,840
$ 232,240
Impairment on note receivable
-
-
11,237
-
Gain on extinguishment of debt, net
-
(38,913)
-
(38,913)
Adjusted FFO
$ 16,621
$ 62,001
$ 68,077
$ 193,327
Weighted average common shares outstanding - diluted
225,670
224,176
224,814
223,676
FFO per diluted share
$ 0.07
$ 0.45
$ 0.25
$ 1.04
Total adjustments
$ -
$ (0.17)
$ 0.05
$ (0.17)
Adjusted FFO per diluted share
$ 0.07
$ 0.28
$ 0.30
$ 0.86
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 September
30, Nine Months Ended September 30,
2020
2019
Variance $
2020
2019
Variance $
Reconciliation of Comp NOI to Net
Loss: Net loss
$ (48,061)
$ (1,665)
$ (46,396)
$ (133,914)
$ (21,108)
$ (112,806)
Loss from unconsolidated entities
5,515
241
5,274
11,301
2,002
9,299
Income and other taxes
154
(120)
274
130
465
(335)
Impairment on note receivable
-
-
-
11,237
-
11,237
Gain on disposition of interests in properties, net
(1,620)
(9,825)
8,205
(28,812)
(26,056)
(2,756)
Gain on extinguishment of debt, net
-
(38,913)
38,913
-
(38,913)
38,913
Interest expense, net
39,725
38,833
892
115,805
114,806
999
Operating (Loss) Income
(4,287)
(11,449)
7,162
(24,253)
31,196
(55,449)
Depreciation and amortization
58,063
70,948
(12,885)
173,147
209,142
(35,995)
Impairment loss
1,067
28,936
(27,869)
26,186
28,936
(2,750)
General and administrative
11,107
12,210
(1,103)
34,721
39,459
(4,738)
Fee income
(2,087)
(3,242)
1,155
(5,504)
(8,669)
3,165
Management fee allocation
79
39
40
115
124
(9)
Pro-rata share of unconsolidated joint ventures in comp NOI
11,412
17,619
(6,207)
39,391
52,443
(13,052)
Property allocated corporate expense
4,269
4,342
(73)
13,216
12,675
541
Non-comparable properties and other (1)
1,471
(15)
1,486
2,740
(888)
3,628
NOI from sold properties
30
(1,137)
1,167
(62)
(4,681)
4,619
Termination income
(172)
(100)
(72)
(278)
(1,512)
1,234
Straight-line rents, net
(1,429)
(1,036)
(393)
64
(2,943)
3,007
Ground lease adjustments for straight-line and fair market value
5
5
-
15
15
-
Fair market value and inducement adjustments to base rents
(4,776)
(915)
(3,861)
(7,407)
(5,302)
(2,105)
Less: Tier 2 and noncore properties (2)
(2,422)
(8,907)
6,485
(17,357)
(29,616)
12,259
Comparable NOI - Tier 1 and Open Air properties
$ 72,330
$107,298
$ (34,968)
$ 234,734
$320,379
$ (85,645)
Comparable NOI percentage change - Tier 1 and Open Air
properties
-32.6%
-26.7%
(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/20201105006230/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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