CLEVELAND, OH , the nation's leading owner, manager and
developer of market-dominant shopping centers, today reported
operating results for the fourth quarter and year ended December
31, 2007.
-- Funds From Operations ("FFO") per diluted share increased 11.1% to
$3.79 and net income per diluted share increased 2.2% to $1.85 for the year
ended December 31, 2007, as compared to the prior year. Excluding
transactional activity relating to gains on sales of real estate, joint
venture promoted income and other income aggregating $93.0 million and
$81.1 million in 2007 and 2006, respectively. FFO per diluted share, as
adjusted, increased over 13% as compared to the prior year.
-- FFO per diluted share was unchanged at $0.82 and net income per
diluted share decreased 38.6% to $0.27 for the three-month period ended
December 31, 2007, as compared to the prior year comparable period.
Excluding transactional activity relating to gains on sales of real estate,
joint venture promoted income and other income aggregating $6.1 million and
$14.3 million for the three-month periods ended December 31, 2007 and 2006,
respectively. FFO per diluted share, as adjusted, increased approximately
12% in 2007 as compared to the prior year comparable period.
-- Executed leases during the fourth quarter totaled approximately 2.2
million square feet, including 138 new leases and 265 renewals.
-- On a cash basis, base rental rates increased 32.5% on new leases, 6.3%
on renewals and 10.5% overall.
-- Core portfolio leased percentage at December 31, 2007 was 96.0%.
-- Same store net operating income ("NOI") for the quarter increased 2.5%
and for the year increased 2.4% over the prior-year comparable period.
Scott Wolstein, Developers Diversified's Chairman and Chief
Executive Officer, stated, "We are pleased to announce this
quarter's financial results, which reflect the strong performance
of our portfolio and the ongoing health of our asset class. We have
experienced various economic cycles in the past and have
demonstrated the consistency and stability of our operating
revenues. From a balance sheet perspective, we believe that we are
appropriately positioned to maximize our cash flows and financial
flexibility."
Mr. Wolstein continued, "Although we are highly focused on the
current uncertainty in the capital markets and economy, we are
encouraged by the simple facts that consumers are still shopping,
tenants are still opening new locations, and private capital is
still investing in retail real estate. While we have consistently
managed our balance sheet in a conservative fashion with
appropriate amounts of equity and long-term debt, we also
continually refine our investment and capital market strategies in
anticipation of changes in capital market conditions."
Financial Results:
Net income applicable to common shareholders was $32.2 million,
or $0.27 per share (diluted and basic), for the three-month period
ended December 31, 2007, as compared to $48.2 million, or $0.44 per
share (diluted and basic), for the prior-year comparable period.
The decrease in net income for the three-month period ended
December 31, 2007, is primarily related to a $14.7 million
reduction in gains on sales of real estate in 2007 as compared to
2006 and a decrease in lease termination fees of $5.5 million,
offset by increases in same store net operating income and
operating results from the merger with Inland Retail Real Estate
Trust, Inc. ("IRRETI").
For the three-month periods ended December 31, 2007 and 2006,
FFO per share was $0.82 (diluted and basic). FFO applicable to
common shareholders was $100.0 million for the three-month period
ended December 31, 2007, as compared to $90.1 million for the
three-month period ended December 31, 2006, an increase of 11.0%.
The increase in FFO for the three-month period ended December 31,
2007, is primarily due to an increase in joint venture FFO and
increases in same store net operating income and operating results
from the merger with IRRETI, partially offset by a reduction in
gains on sale of real estate and lease termination income.
Net income applicable to common shareholders was $225.1 million,
or $1.85 per share (diluted) and $1.86 per share (basic), for the
year ended December 31, 2007, as compared to $198.1 million, or
$1.81 per share (diluted) and $1.82 per share (basic), for the
previous year. The increase in net income for the year ended
December 31, 2007, is primarily related to the merger with IRRETI,
the release of certain valuation reserves, income earned from
recently formed joint ventures and promoted income related to the
sale of assets from joint ventures. These increases were partially
offset by a non-cash charge relating to the redemption of preferred
shares, certain merger integration costs and a charge relating to
the departure of the Company's former president.
For the year ended December 31, 2007, FFO per share was $3.79
(diluted) and $3.80 (basic) as compared to $3.41 (diluted) and
$3.43 (basic) for the previous year, an increase of 11.1% on a
diluted basis. FFO applicable to common shareholders was $465.0
million for the year ended December 31, 2007, as compared to $377.8
million for the year ended December 31, 2006, an increase of
23.1%.
FFO is a supplemental non-GAAP financial measurement used as a
standard in the real estate industry and a widely accepted measure
of real estate investment trust ("REIT") performance. Management
believes that FFO provides an additional indicator of the financial
performance of a REIT. The Company also believes that FFO more
appropriately measures the core operations of the Company and
provides a benchmark to its peer group. FFO does not represent cash
generated from operating activities in accordance with generally
accepted accounting principles, is not necessarily indicative of
cash available to fund cash needs and should not be considered as
an alternative to net income computed in accordance with GAAP as an
indicator of the Company's operating performance or as an
alternative to cash flow as a measure of liquidity. FFO is defined
and calculated by the Company as net income, adjusted to exclude:
(i) preferred dividends, (ii) gains from disposition of depreciable
real estate property, except for those sold through the Company's
merchant building program, (iii) sales of securities, (iv)
extraordinary items, (v) cumulative effect of changes in accounting
standards and (vi) certain non-cash items. These non-cash items
principally include real property depreciation and amortization of
intangibles, equity income from joint ventures and equity income
from minority equity investments and adding the Company's
proportionate share of FFO from its unconsolidated joint ventures
and minority equity investments, determined on a consistent basis.
Other real estate companies may calculate FFO in a different
manner. A reconciliation of net income to FFO is presented in the
financial highlights section.
Leasing:
The following results from the fourth quarter ended December 31,
2007, highlight continued strong leasing activity throughout the
portfolio:
-- Executed 138 new leases aggregating 0.8 million square feet and 265
renewals aggregating 1.4 million square feet.
-- On a cash basis, rental rates on new leases increased 32.5% and rental
rates on renewals increased 6.3%. Overall, rental rates for new leases and
renewals increased 10.5%.
-- Total portfolio average annualized base rent per occupied square foot,
excluding Brazil, as of December 31, 2007 was $12.33, as compared to $11.74
at December 31, 2006.
-- Core portfolio leased rate was 96.0% as of December 31, 2007 as
compared to 96.2% at December 31, 2006.
The Company and its joint ventures (at 100%) estimate total
annual recurring leasing capital expenditures to be approximately
$25 million ($0.21 per square foot of owned GLA) in 2008.
Acquisitions:
In November 2007, through a 50% joint venture interest, the
Company acquired a 207,000 square foot shopping center in San
Antonio, Texas for approximately $16.9 million, of which $12.8
million was funded through the use of a construction loan. This
center is consolidated in the results of the Company. Through its
joint venture, the Company intends to redevelop the shopping
center.
Common Share Repurchase Program:
During the second quarter of 2007, the Company's Board of
Directors authorized a common share repurchase program. Under the
terms of the program, the Company may purchase up to a maximum
value of $500 million of its common shares during the next two
years. Through February 11, 2008, the Company repurchased 5.6
million of its common shares in open market transactions at an
aggregate cost of approximately $261.9 million, which reflects a
weighted-average price per share of $46.66.
Wholly-Owned and Consolidated Joint Venture Development:
The Company currently has the following wholly-owned and
consolidated shopping center projects under construction:
Estimated
Expected Initial
Net Cost Anchor
Location Owned GLA ($Millions) Opening * Description
--------------------- --------- ------------ ---------- ----------------
Ukiah (Mendocino), **
California 409,900 $ 101.4 1H 10 Community Center
Miami (Homestead),
Florida 275,839 74.9 2H 08 Community Center
Miami, Florida 400,685 142.6 2H 06 Mixed Use
Tampa (Brandon),
Florida 241,700 55.5 2H 09 Community Center
Tampa (Wesley Chapel),
Florida 73,360 13.7 2H 09 Community Center
Boise (Nampa), Idaho 450,855 123.1 2H 07 Community Center
Boston, Massachusetts
(Seabrook, New
Hampshire) 210,180 50.1 2H 09 Community Center
Elmira (Horseheads),
New York 350,987 53.0 1H 07 Community Center
Raleigh (Apex), North
Carolina (Promenade) 81,780 17.9 2H 09 Community Center
Raleigh (Apex), North
Carolina (Beaver Creek
Crossing, Phase II) 162,270 50.8 2H 10 Community Center
Austin (Kyle), Texas ** 325,005 60.0 2H 09 Community Center
---------- ----------
Total 2,982,561 $ 743.0
========== ==========
* 1H = First Half, 2H = Second Half
** Consolidated 50% Joint Venture
At December 31, 2007, $411.3 million of costs were incurred in
relation to the Company's twelve development projects under
construction.
In addition to these developments, the Company has identified
several additional development opportunities reflecting an
aggregate estimated cost of over $1 billion. While there are no
assurances any of these projects will move forward, they provide a
source of potential development projects over the next several
years. As of December 31, 2007, the projected unleveraged GAAP
return on the Company's aggregate development and redevelopment
pipeline is approximately 10%.
Unconsolidated Joint Venture Development:
The Company's joint ventures have the following shopping center
projects under construction. At December 31, 2007, $236.0 million
of costs had been incurred in relation to these development
projects.
DDR's Estimated
Effective Expected Initial
Ownership Net Cost Anchor
Location Percentage Owned GLA ($Millions) Opening* Description
--------- ---------- --------- --------- -------- -------------
Kansas City
(Merriam),
Kansas 20.0% 202,116 $ 46.8 2H 08 Community Center
Detroit
(Bloomfield
Hills),
Michigan 10.0% 882,197 192.5 2H 09 Lifestyle Center
Dallas (Allen),
Texas 10.0% 797,665 171.2 1H 08 Lifestyle Center
Manaus, Brazil 47.2% 477,630 82.6 1H 09 Enclosed Mall
----------- --------
Total 2,359,608 $ 493.1
=========== ========
* 1H = First Half, 2H = Second Half
Wholly-Owned and Consolidated Joint Venture Redevelopments and
Expansions:
The Company is currently expanding/redeveloping the following
shopping centers at a projected aggregate net cost of approximately
$152.5 million. At December 31, 2007, approximately $89 million of
costs had been incurred in relation to these projects.
Property Description
-------- -----------
Miami (Plantation), Florida Redevelop shopping center to include Kohl's
and additional junior anchors
Chesterfield, Michigan Construct 25,400 sf of small shop space and
retail space
Olean, New York Wal-Mart expansion and tenant relocation
Fayetteville, North Carolina Redevelop 18,000 sf of small shop space and
construct an outparcel building
Akron (Stow), Ohio Redevelop former K-Mart space and develop
new outparcels
Dayton (Huber Heights), Ohio Construct 45,000 sf junior anchor
Unconsolidated Joint Venture Redevelopments and Expansions:
The Company's joint ventures are currently
expanding/redeveloping the following shopping centers at a
projected net cost of $461.6 million, which includes certain
initial acquisition costs. At December 31, 2007, approximately
$391.2 million of costs had been incurred in relation to these
projects. The following is a summary of these joint venture
redevelopment and expansion projects:
DDR's
Effective
Ownership
Property Percentage Description
------------ ----------- ----------------
Buena Park, California 20.0% Large-scale redevelopment of enclosed
mall to open-air format
Los Angeles (Lancaster), 21.0% Relocate Wal-Mart and redevelop former
California Wal-Mart space
Chicago (Deer Park), 25.75% Retenant former retail shop space with
Illinois junior anchor and construct 13,500 sf
multi-tenant outparcel building
Benton Harbor, Michigan 20.0% Construct 89,000 sf of anchor space and
retail shops
Kansas City, Missouri 20.0% Relocate retail shops and retenant
former retail shop space
Cincinnati, Ohio 18.0% Redevelop former JCPenney space
Financing:
In December 2007, the Company amended its revolving credit
facilities to increase its borrowing capacity by $65 million to
$1.325 billion, to permit borrowings in Canadian dollars and to
amend certain covenants in a manner that provides greater financial
flexibility. Borrowings under this facility are at LIBOR plus 60
basis points.
The Company also amended its term loan agreement with Key Bank
to increase the aggregate commitment amount from $550 million to
$800 million, to provide additional collateral to support the
increased commitment, to amend certain covenants in a manner that
provides greater financial flexibility and to admit certain banks
as lenders. Borrowings under this facility are LIBOR plus 70 basis
points.
In December 2007, the Company's joint venture that holds the
assets formerly occupied by Service Merchandise exercised a
one-year extension on its existing loan to January 2009. All terms
of the loan remain the same and include two additional one-year
extension options.
The Company also obtained $60 million of tax-exempt financing
for its Gulfport, Mississippi development project. The proceeds
associated with this financing are included in restricted cash.
Developers Diversified currently owns and manages over 740
retail operating and development properties in 45 states, plus
Puerto Rico, Brazil, Russia and Canada, totaling approximately 163
million square feet. Developers Diversified Realty is a
self-administered and self-managed real estate investment trust
(REIT) operating as a fully integrated real estate company which
acquires, develops, leases and manages shopping centers.
A copy of the Company's Supplemental Financial/Operational
package is available to all interested parties upon request at our
corporate office to Michelle M. Dawson, Vice President of Investor
Relations, Developers Diversified Realty Corporation, 3300
Enterprise Parkway, Beachwood, OH 44122 or on our Web site which is
located at http://www.ddr.com.
Developers Diversified Realty Corporation considers portions of
this information to be forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21
E of the Securities Exchange Act of 1934, both as amended, with
respect to the Company's expectation for future periods. Although
the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
it can give no assurance that its expectations will be achieved.
For this purpose, any statements contained herein that are not
historical fact may be deemed to be forward-looking statements.
There are a number of important factors that could cause the
results of the Company to differ materially from those indicated by
such forward-looking statements, including, among other factors,
local conditions such as oversupply of space or a reduction in
demand for real estate in the area, competition from other
available space, dependence on rental income from real property,
the loss of a major tenant, constructing properties or expansions
that produce a desired yield on investment or inability to enter
into definitive agreements with regard to our financing
arrangements or our failure to satisfy conditions to the completion
of these arrangements. For more details on the risk factors, please
refer to the Company's Form 10-K as of December 31, 2006.
DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights
(In thousands - except per share data)
Three-Month Period Year Ended
Ended December 31, December 31,
Revenues: 2007 2006 2007 2006
--------- --------- ---------- ----------
Minimum rents (A) $ 160,450 $ 133,125 $ 644,286 $ 530,510
Percentage and overage
rents (A) 5,130 5,548 10,694 10,794
Recoveries from tenants 51,967 44,203 205,664 169,313
Ancillary and other property
income 5,551 6,085 19,642 19,556
Management, development and
other fee income 15,934 8,973 50,840 30,294
Other (B) 161 5,631 13,725 14,857
--------- --------- ---------- ----------
239,193 203,565 944,851 775,324
--------- --------- ---------- ----------
Expenses:
Operating and maintenance 37,982 29,280 133,334 107,208
Real estate taxes 26,114 23,456 108,977 89,895
General and administrative
(C) 20,940 14,873 81,244 60,679
Depreciation and
amortization 55,957 46,867 219,101 182,007
--------- --------- ---------- ----------
140,993 114,476 542,656 439,789
--------- --------- ---------- ----------
Other income (expense):
Interest income 1,057 1,510 8,808 9,053
Interest expense (64,680) (54,227) (261,318) (208,512)
Other expense (D) (2,344) (910) (3,019) (446)
--------- --------- ---------- ----------
(65,967) (53,627) (255,529) (199,905)
--------- --------- ---------- ----------
Income before equity in net
income of joint ventures,
minority equity interests,
income tax benefit of
taxable REIT subsidiaries
and franchise taxes,
discontinued operations and
gain on disposition of real
estate 32,233 35,462 146,666 135,630
Equity in net income of joint
ventures (E) 9,343 7,381 43,229 30,337
Minority equity interests (F) (2,094) (1,949) (17,783) (8,453)
Income tax (expense) benefit
of taxable REIT subsidiaries
and franchise taxes (G) (645) (193) 14,642 2,497
--------- --------- ---------- ----------
Income from continuing
operations 38,837 40,701 186,754 160,011
(Loss) income from
discontinued operations (H) (1,183) 10,389 20,442 21,230
--------- --------- ---------- ----------
Income before gain on
disposition of real estate 37,654 51,090 207,196 181,241
Gain on disposition of real
estate, net of tax 5,137 10,899 68,851 72,023
--------- --------- ---------- ----------
Net income $ 42,791 $ 61,989 $ 276,047 $ 253,264
========= ========= ========== ==========
Net income, applicable to
common shareholders $ 32,224 $ 48,197 $ 225,113 $ 198,095
========= ========= ========== ==========
Funds From Operations
("FFO"):
Net income applicable to
common shareholders $ 32,224 $ 48,197 $ 225,113 $ 198,095
Depreciation and
amortization of real
estate investments 53,577 47,377 214,396 185,449
Equity in net income of
joint ventures (E) (9,343) (7,381) (43,229) (30,337)
Joint ventures' FFO (E) 21,949 11,510 84,423 44,473
Minority equity interests
(OP Units) (F) 569 515 2,275 2,116
Loss (gain) on disposition
of depreciable real estate 1,057 (10,118) (17,956) (21,987)
--------- --------- ---------- ----------
FFO applicable to common
shareholders 100,033 90,100 465,022 377,809
Preferred dividends 10,567 13,792 50,934 55,169
--------- --------- ---------- ----------
FFO $ 110,600 $ 103,892 $ 515,956 $ 432,978
========= ========= ========== ==========
Per share data:
Earnings per common
share
Basic $ 0.27 $ 0.44 $ 1.86 $ 1.82
========= ========= ========== ==========
Diluted $ 0.27 $ 0.44 $ 1.85 $ 1.81
========= ========= ========== ==========
Dividends Declared $ 0.66 $ 0.59 $ 2.64 $ 2.36
========= ========= ========== ==========
Funds From Operations -
Basic (I) $ 0.82 $ 0.82 $ 3.80 $ 3.43
========= ========= ========== ==========
Funds From Operations -
Diluted (I) $ 0.82 $ 0.82 $ 3.79 $ 3.41
========= ========= ========== ==========
Basic - average shares
outstanding (I) 120,786 108,638 120,879 109,002
========= ========= ========== ==========
Diluted - average shares
outstanding (I) 121,103 109,308 121,497 109,613
========= ========= ========== ==========
DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights
(In thousands - except per share data)
(A) Increases in base and percentage rental revenues for the year ended
December 31, 2007, as compared to 2006, aggregated $117.3 million
consisting of $7.0 million related to leasing of core portfolio
properties (an increase of 1.5% from 2006), $113.0 million from the
acquisition of assets and the merger with IRRETI, $7.3 million related
to developments and redevelopments and $1.6 million from an increase
in occupancy at the business centers. These amounts were offset by a
decrease of $11.6 million due to the disposition of properties in 2006
and 2007. Included in the rental revenues for years ended December
31, 2007 and 2006, is approximately $12.1 million and $16.0 million,
respectively, of revenue resulting from the recognition of
straight-line rents.
(B) Other income for the three-month periods and years ended December 31,
2007 and 2006 was comprised of the following (in millions):
Three-Month Period Year Ended
Ended December 31, December 31,
2007 2006 2007 2006
---------- ---------- ---------- ----------
Acquisition fees $ 0.1 $ - $ 6.4 $ -
Lease termination fees 0.1 5.6 5.0 14.0
Financings fees - - 1.5 0.4
Other miscellaneous - - 0.8 0.5
---------- ---------- ---------- ----------
$ 0.2 $ 5.6 $ 13.7 $ 14.9
========== ========== ========== ==========
(C) General and administrative expenses include internal leasing salaries,
legal salaries and related expenses associated with the releasing of
space, which are charged to operations as incurred. For the years
ended December 31, 2007 and 2006, general and administrative expenses
were approximately 4.5% and 4.8%, respectively, of total revenues,
including joint venture revenues. For the year ended December 31,
2007, the Company recorded a charge of approximately $4.1 million to
general and administrative expense in connection with the former
president's departure as an executive officer. Excluding this charge,
general and administrative expenses were 4.3% of total revenues for the
year ended December 31, 2007. In addition, the Company incurred
certain one time integration costs in connection with the IRRETI
acquisition that aggregated approximately $2.8 million for the year
ended December 31, 2007.
(D) Other income/expense primarily relates to abandoned acquisition and
development project costs, litigation costs, formation costs primarily
associated with the Company's joint venture with ECE and other
non-recurring income and expenses. In 2006, the Company received
proceeds of approximately $1.3 million from a litigation settlement.
DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights
(In thousands - except per share data)
(E) The following is a summary of the combined operating results of the
Company's joint ventures:
Three-Month Period Year Ended
Ended December 31, December 31,
2007 2006 2007 2006
--------- --------- --------- ---------
Revenues from operations (a) $ 237,654 $ 122,360 $ 812,630 $ 429,190
--------- --------- --------- ---------
Operating expense 84,547 44,807 272,277 145,893
Depreciation and amortization
of real estate investments 57,825 22,181 193,032 81,262
Interest expense 79,543 35,213 269,405 129,000
--------- --------- --------- ---------
221,915 102,201 734,714 356,155
--------- --------- --------- ---------
Income from operations before
tax expense, gain on
disposition of real estate and
discontinued operations 15,739 20,159 77,916 73,035
Income tax benefit (expense) 2,664 (1,176) (4,839) (1,176)
Gain on disposition of real
estate 1,399 161 94,386 398
Income (loss) from discontinued
operations, net of tax 75 (780) (784) 24
(Loss) gain on disposition of
discontinued operations, net
of tax (12) 433 2,516 20,343
--------- --------- --------- ---------
Net income $ 19,865 $ 18,797 $ 169,195 $ 92,624
========= ========= ========= =========
DDR ownership interests (b) $ 10,017 $ 6,171 $ 44,537 $ 28,530
========= ========= ========= =========
FFO from joint ventures are
summarized as follows:
Net income $ 19,865 $ 18,797 $ 169,195 $ 92,624
Loss (gain) on disposition of
real estate, including
discontinued operations 228 (576) (91,111) (22,013)
Depreciation and amortization
of real estate investments 57,919 22,507 193,437 83,017
--------- --------- --------- ---------
$ 78,012 $ 40,728 $ 271,521 $ 153,628
========= ========= ========= =========
DDR ownership interests (b) $ 21,949 $ 11,510 $ 84,423 $ 44,473
========= ========= ========= =========
DDR joint venture
distributions received, net
(c) $ 17,323 $ 25,240 $ 97,104 $ 74,090
========= ========= ========= =========
(a) Revenues for the three-month periods ended December 31, 2007 and
2006 included approximately $2.7 million and $1.3 million,
respectively, resulting from the recognition of straight-line rents
of which the Company's proportionate share is $0.4 million and $0.2
million, respectively. Revenues for the years ended December 31,
2007 and 2006 included approximately $9.3 million and $5.1 million,
respectively, resulting from the recognition of straight-line rents
of which the Company's proportionate share is $1.4 million and $0.9
million, respectively.
(b) The Company's share of joint venture net income decreased by $0.6
million and increased by $1.2 million for the three-month periods
ended December 31, 2007 and 2006, respectively. The Company's
share of joint venture net income decreased by $1.2 million and
increased by $1.6 million for the years ended December 31, 2007 and
2006, respectively. These adjustments reflect basis differences
impacting amortization and depreciation and gain on dispositions.
During the year ended December 31, 2007, the Company received $14.3
million of promoted income, of which $13.6 million related to the
sale of assets from the DDR Markaz Joint Venture which is included
in the Company's proportionate share of net income and FFO.
At December 31, 2007 and 2006, the Company owned joint venture
interests, excluding consolidated joint ventures, in 274 and 117
shopping center properties, respectively. In addition, at December
31, 2007 and 2006, the Company owned 44 and 50 shopping center
sites formerly owned by Service Merchandise, respectively, through
its 20% owned joint venture with Coventry II.
(c) Distributions may include funds received from asset sales and
refinancings in addition to ongoing operating distributions.
DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights
(In thousands - except per share data)
(F) Minority equity interests are comprised of the following:
Three-Month Period Year Ended
Ended December 31, December 31,
2007 2006 2007 2006
---------- ---------- ---------- ----------
Minority interests $ 1,525 $ 1,434 $ 5,818 $ 6,337
Operating partnership units 569 515 2,275 2,116
Preferred operating
partnership units - - 9,690 -
---------- ---------- ---------- ----------
$ 2,094 $ 1,949 $ 17,783 $ 8,453
========== ========== ========== ==========
The preferred operating partnership units were redeemed in June 2007.
(G) During the first quarter of 2007, the Company released to income
approximately $15.0 million of previously established valuation
allowances against certain deferred tax assets as management had
determined, due to several factors, that it is more likely than not
that the deferred tax asset will be realized. The release was primarily
due to the Company's increased use of its taxable REIT subsidiaries
relating to its merchant building program.
(H) The operating results relating to assets classified as discontinued
operations are summarized as follows:
Three-Month Period Year Ended
Ended December 31, December 31,
2007 2006 2007 2006
--------- ---------- ---------- ----------
Revenues $ 116 $ 12,006 $ 28,839 $ 49,402
--------- ---------- ---------- ----------
Expenses:
Operating 79 3,588 8,206 13,407
Interest, net 38 3,216 7,176 14,295
Depreciation 118 2,695 5,274 11,521
--------- ---------- ---------- ----------
Total expenses 235 9,499 20,656 39,223
--------- ---------- ---------- ----------
(Loss) income before (loss)
gain on disposition of real
estate (119) 2,507 8,183 10,179
--------- ---------- ---------- ----------
(Loss) gain on disposition of
real estate (1,064) 7,882 12,259 11,051
--------- ---------- ---------- ----------
Net (loss) income $ (1,183) $ 10,389 $ 20,442 $ 21,230
--------- ---------- ---------- ----------
(I) For purposes of computing FFO per share (basic), the weighted average
shares outstanding were adjusted to reflect the conversion of
approximately 0.9 million Operating Partnership Units (OP Units)
outstanding at December 31, 2007 and 2006, into 0.9 million common
shares of the Company for both of the three-month periods ended
December 31, 2007 and 2006, and 0.9 million and 1.0 million for the
years ended December 31, 2007 and 2006, respectively, on the weighted
average basis. The weighted average diluted shares and OP Units
outstanding, for purposes of computing FFO, were approximately 122.5
million and 110.4 million for the three-month periods ended December
31, 2007 and 2006, respectively, and 122.7 and 110.8 million for the
years ended December 31, 2007 and 2006, respectively.
DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights
(In thousands)
Selected Balance Sheet Data:
December 31, December 31,
2007 (A) 2006 (A)
-------------- --------------
Assets:
Real estate and rental property:
Land $ 2,142,942 $ 1,768,702
Buildings 5,933,890 5,023,665
Fixtures and tenant improvements 237,117 196,275
-------------- --------------
8,313,949 6,988,642
Less: Accumulated depreciation (1,024,048) (861,266)
-------------- --------------
7,289,901 6,127,376
Construction in progress 664,926 453,493
Assets held for sale 5,796 5,324
-------------- --------------
Real estate, net 7,960,623 6,586,193
Investments in and advances to joint
ventures 638,111 291,685
Cash 49,547 28,378
Restricted cash 58,958 -
Notes receivable 18,557 18,161
Receivables, including straight-line rent,
net 199,354 152,161
Other assets, net 164,666 103,175
-------------- --------------
$ 9,089,816 $ 7,179,753
============== ==============
Liabilities:
Indebtedness:
Revolving credit facilities $ 709,459 $ 297,500
Unsecured debt 2,622,219 2,218,020
Mortgage and other secured debt 2,259,336 1,733,292
-------------- --------------
5,591,014 4,248,812
Dividends payable 85,851 71,269
Other liabilities 285,245 241,556
-------------- --------------
5,962,110 4,561,637
Minority interests 128,881 121,933
Shareholders? equity 2,998,825 2,496,183
-------------- --------------
$ 9,089,816 $ 7,179,753
============== ==============
(A) Amounts include the consolidation of Mervyns, a 50% owned joint
venture, which includes $405.8 million of real estate assets at
December 31, 2007 and 2006, $258.5 million of mortgage debt at December
31, 2007 and 2006, and $74.6 million and $77.6 million of minority
interest at December 31, 2007 and 2006, respectively.
DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights
(in thousands)
Selected Balance Sheet Data (Continued):
Combined condensed balance sheets relating to the Company's joint ventures
are as follows:
December 31, December 31,
2007 2006
-------------- --------------
Land $ 2,384,069 $ 933,916
Buildings 6,253,167 2,788,863
Fixtures and tenant improvements 101,115 59,166
-------------- --------------
8,738,351 3,781,945
Less: Accumulated depreciation (412,806) (247,012)
-------------- --------------
8,325,545 3,534,933
Construction in progress 207,387 157,762
-------------- --------------
Real estate, net 8,532,932 3,692,695
Receivables, including straight-line rent,
net 124,540 75,024
Leasehold interests 13,927 15,195
Other assets 365,925 132,984
-------------- --------------
$ 9,037,324 $ 3,915,898
============== ==============
Mortgage debt (a) $ 5,551,839 $ 2,495,080
Notes and accrued interest payable to DDR 8,492 4,960
Other liabilities 201,083 94,648
-------------- --------------
5,761,414 2,594,688
Accumulated equity 3,275,910 1,321,210
$ 9,037,324 $ 3,915,898
(a) The Company's proportionate share of joint venture debt aggregated
approximately $1,034.1 million and $525.6 million at December 31,
2007 and 2006, respectively.
Contact: Scott A. Wolstein Chairman and Chief Executive Officer
216-755-5500 Michelle M. Dawson Vice President of Investor
Relations 216-755-5500 Email Contact
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