Kite Realty Group Trust (NYSE:KRG) (the “Company”) announced today
its operating results for the third quarter ended September 30,
2017. Financial statements, exhibits, and reconciliations of
non-GAAP measures attached to this release include the details of
the Company’s results.
Third Quarter Highlights
- Net loss attributable to common shareholders was $0.6 million,
or $0.01 per diluted common share.
- Funds From Operations of the Operating Partnership (“FFO”), as
defined by NAREIT, was $41.8 million, or $0.49 per diluted
share.
- Same-Property Net Operating Income (“NOI”) increased 3.6% for
the comparable operating portfolio, or 3.9% excluding the impact of
the Company’s Redevelopment, Repurpose and Reposition (“3-R”)
initiative, in each case compared to the same period in the prior
year.
- Small shop leased percentage increased 100 basis points to
89.7% from the same period in the prior year.
- The aggregate rent spread on comparable new and renewal leases
was 11.1% on a cash basis and 17.0% on a GAAP basis.
- Construction commenced on Phase II of Eddy Street Commons at
the University of Notre Dame.
“Our portfolio and operating results
continue to be strong, as evidenced by another excellent quarter,”
said John Kite, Chief Executive Officer. “We remain committed to
our long-term strategic goals, which we are demonstrating by
continuing to execute on high-quality projects in our 3-R
initiative, driving strong same-store results, and increasing small
shop leasing, which increased by another 100 basis points compared
to last year to reach 89.7%.”
Financial & Portfolio
Results
Financial Results
Net loss attributable to common shareholders for
the three months ended September 30, 2017, was $0.6 million,
compared to a net loss of $1.7 million for the same period in
2016.
For the three months ended September 30, 2017, FFO,
as defined by NAREIT, was $41.8 million, or $0.49 per diluted
share, compared to $43.6 million, or $0.51 per diluted share, for
the same period in the prior year. For the three months ended
September 30, 2017, FFO, as adjusted, was $41.8 million, or $0.49
per diluted share, compared to $44.7 million, or $0.52 per diluted
share, for the same period in the prior year. The
year-over-year decline in FFO was primarily due to the sale of four
operating properties and the use of the resulting proceeds to pay
down debt.
Portfolio Operations
As of September 30, 2017, the Company owned
interests in 117 operating and redevelopment properties totaling
approximately 23.1 million square feet and two development projects
currently under construction. The owned gross leasable area in the
Company’s retail operating portfolio was 94.5% leased as of
September 30, 2017, and the Company’s total portfolio was 94.6%
leased. We continue to increase our small-shop leased percentage,
and hit a new high of 89.7% leased in the third quarter, an
increase of 100 basis points year over year.
Same-property NOI, which includes 104 operating
properties, increased 3.6% in the third quarter compared to the
same period in the prior year, or 3.9% excluding the impact of the
Company’s 3-R initiative. The leased percentage of properties
included in the same-property pool was 94.4% at September 30, 2017,
compared to 95.1% at September 30, 2016, while the economic
occupancy percentage increased to 93.5% from 92.8% year over
year.
The Company executed 86 leases totaling 432,814
square feet during the third quarter of 2017, including 65
comparable new and renewal leases for 384,816 square feet. Cash
rent spreads on comparable new and renewal leases executed in the
quarter were 18.9% and 9.7%, respectively, for a blended cash rent
spread of 11.1%. The blended leasing spread on a straight-line
basis, which includes periodic contractual rent increases over the
term of the lease, was 17.0%.
The majority of the 35 tenants opening for business
in the third quarter were in the food, fitness, entertainment, and
service sectors. Openings this quarter included a new Publix
Supermarket at Burnt Store Promenade (one of our 3-R projects),
Ulta Salon, Pet Supermarket, Tuesday Morning, and Le Creuset.
Development and Redevelopment
As of September 30, 2017, we had two development
projects under construction. The expansion of Phase II of Holly
Springs is 100% pre-leased or committed, with projected costs of
$2.7 million. Phase II of Eddy Street Commons is a mixed-use
development at the University of Notre Dame that will include a
retail component, apartments, townhomes, and a community
center. The total projected costs for the project are
currently $89.2 million. We are in the final stages of entering
into a ground sublease with a multi-family developer who will fund
the majority of these costs, leaving our share of the projected
costs at $8.5 million. The Company has also begun construction of a
full-service hotel in Phase I of Eddy Street Commons, which we
project will cost $46.0 million to construct. We are in the final
stages of negotiating to form and retain a minority interest in an
unconsolidated joint venture that will complete and own this hotel.
Funding for both Eddy Street Commons projects will include a total
of $22.1 million in net tax increment financing proceeds.
The Company’s 3-R program currently includes eight
projects under various stages of construction, with estimated
combined costs ranging from $72.5 to $79.0 million and an estimated
combined annualized return ranging from 8.0% to 9.0%. During the
quarter, the Company commenced construction on one new project at
Centennial Center (Las Vegas, NV).
2017 Earnings Guidance
The Company is updating its guidance for 2017 FFO,
as defined by NAREIT, to a range of $2.03 to $2.05 from $2.01 to
$2.05 per diluted share. Please refer to the full list of guidance
assumptions on page 38 of the Company’s third quarter
supplemental.
Guidance Range
For Full Year 2017 |
Low |
High |
Consolidated net income
per diluted common share |
$ |
0.16 |
|
|
$ |
0.18 |
|
|
Add: Depreciation,
amortization and other |
1.96 |
|
|
1.96 |
|
|
Less: Gain on sale of
operating property |
(0.18 |
) |
|
(0.18 |
) |
|
Add: Impairment of
operating property |
0.09 |
|
|
0.09 |
|
|
FFO, as defined
by NAREIT, per diluted share |
$ |
2.03 |
|
|
$ |
2.05 |
|
|
Earnings Conference Call
The Company will conduct a conference call to
discuss its financial results on Friday, October 27, 2017, at 11:00
a.m. Eastern Time. A live webcast of the conference call will
be available online on the Company’s corporate website at
www.kiterealty.com. The dial-in numbers are (844) 309-0605
for domestic callers and (574) 990-9933 for international callers
(passcode 93988642). In addition, a webcast replay link will
be available on the corporate website.
About Kite Realty Group Trust
Kite Realty Group Trust is a full-service,
vertically integrated real estate investment trust (REIT) engaged
primarily in the ownership and operation, acquisition, development
and redevelopment of high-quality neighborhood and community
shopping centers in select markets in the United States. As of
September 30, 2017, we owned interests in 117 operating and
redevelopment properties totaling approximately 23.1 million square
feet and two development projects currently under construction.
Our strategy is to maximize the cash flow of our
operating properties, successfully complete the construction and
lease-up of our redevelopment and development portfolio, and
identify additional opportunities to acquire or dispose of
properties to further strengthen the Company. New investments are
focused in the shopping center sector primarily in markets where we
believe we can leverage our existing infrastructure and
relationships to generate attractive risk-adjusted returns or
otherwise in desirable trade areas. Dispositions are generally
designed to increase the quality of our portfolio and to strengthen
the Company’s balance sheet.
Safe Harbor
Certain statements in this document that are not
historical fact may constitute forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such statements
are based on assumptions and expectations that may not be realized
and are inherently subject to risks, uncertainties and other
factors, many of which cannot be predicted with accuracy and some
of which might not even be anticipated. Future events and actual
results, performance, transactions or achievements, financial or
otherwise, may differ materially from the results, performance,
transactions or achievements, financial or otherwise, expressed or
implied by the forward-looking statements. Risks, uncertainties and
other factors that might cause such differences, some of which
could be material, include, but are not limited to: national and
local economic, business, real estate and other market conditions,
particularly in light of low growth in the U.S. economy as well as
economic uncertainty caused by fluctuations in the prices of oil
and other energy sources; financing risks, including the
availability of, and costs associated with, sources of liquidity;
the Company’s ability to refinance, or extend the maturity dates
of, its indebtedness; the level and volatility of interest rates;
the financial stability of tenants, including their ability to pay
rent and the risk of tenant bankruptcies; the competitive
environment in which the Company operates; acquisition,
disposition, development and joint venture risks; property
ownership and management risks; the Company’s ability to maintain
its status as a real estate investment trust for federal income tax
purposes; potential environmental and other liabilities; impairment
in the value of real estate property the Company owns; the impact
of online retail and the perception that such retail has on the
value of shopping center assets; risks related to the geographical
concentration of the Company’s properties in Florida, Indiana and
Texas; insurance costs and coverage; risks associated with
cybersecurity attacks and the loss of confidential information and
other business interruptions; and other factors affecting the real
estate industry generally. The Company refers you to the documents
filed by the Company from time to time with the SEC, specifically
the section titled “Risk Factors” in the Company’s and the
Operating Partnership’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2016, which discuss these and other factors
that could adversely affect the Company’s results. The Company
undertakes no obligation to publicly update or revise these
forward-looking statements, whether as a result of new information,
future events or otherwise.
Kite Realty Group Trust |
Consolidated Balance Sheets |
(Unaudited) |
|
($ in
thousands) |
|
|
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
Assets: |
|
|
|
|
Investment properties,
at cost |
|
$ |
3,955,928 |
|
|
$ |
3,996,065 |
|
Less:
accumulated depreciation |
|
(635,583 |
) |
|
(560,683 |
) |
|
|
3,320,345 |
|
|
3,435,382 |
|
|
|
|
|
|
Cash and cash
equivalents |
|
32,465 |
|
|
19,874 |
|
Tenant and other
receivables, including accrued straight-line rent of $30,956 and
$28,703 respectively, net of allowance for uncollectible
accounts |
|
53,271 |
|
|
53,087 |
|
Restricted cash and
escrow deposits |
|
8,878 |
|
|
9,037 |
|
Deferred costs and
intangibles, net |
|
115,623 |
|
|
129,264 |
|
Prepaid and other
assets |
|
12,810 |
|
|
9,727 |
|
Total
Assets |
|
$ |
3,543,392 |
|
|
$ |
3,656,371 |
|
Liabilities and
Shareholders’ Equity: |
|
|
|
|
Mortgage and other
indebtedness, net |
|
$ |
1,681,676 |
|
|
$ |
1,731,074 |
|
Accounts payable and
accrued expenses |
|
101,574 |
|
|
80,664 |
|
Deferred revenue and
other liabilities |
|
101,066 |
|
|
112,202 |
|
Total
Liabilities |
|
1,884,316 |
|
|
1,923,940 |
|
Commitments and
contingencies |
|
|
|
|
Limited Partners’
interests in the Operating Partnership and other redeemable
noncontrolling interests |
|
73,454 |
|
|
88,165 |
|
Shareholders’
Equity: |
|
|
|
|
Kite Realty Group Trust Shareholders’ Equity: |
|
|
|
|
Common
Shares, $.01 par value, 225,000,000 shares authorized, 83,594,068
and 83,545,398 shares issued and outstanding at September 30, 2017
and December 31, 2016, respectively |
|
836 |
|
|
835 |
|
Additional paid in capital |
|
2,068,636 |
|
|
2,062,360 |
|
Accumulated other comprehensive loss |
|
1,050 |
|
|
(316 |
) |
Accumulated deficit |
|
(485,598 |
) |
|
(419,305 |
) |
Total Kite Realty Group Trust Shareholders’
Equity |
|
1,584,924 |
|
|
1,643,574 |
|
Noncontrolling
Interests |
|
698 |
|
|
692 |
|
Total
Equity |
|
1,585,622 |
|
|
1,644,266 |
|
Total
Liabilities and Shareholders' Equity |
|
$ |
3,543,392 |
|
|
$ |
3,656,371 |
|
Kite Realty Group Trust |
Consolidated Statements of
Operations |
For the Three and Nine Months Ended September
30, 2017 and 2016 |
(Unaudited) |
|
($ in
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenue: |
|
|
|
|
|
|
|
|
Minimum
rent |
|
$ |
67,585 |
|
|
$ |
69,518 |
|
|
$ |
204,926 |
|
|
$ |
205,436 |
|
Tenant
reimbursements |
|
17,657 |
|
|
17,531 |
|
|
54,748 |
|
|
52,691 |
|
Other
property related revenue |
|
1,896 |
|
|
2,073 |
|
|
10,226 |
|
|
7,120 |
|
Total
revenue |
|
87,138 |
|
|
89,122 |
|
|
269,900 |
|
|
265,247 |
|
Expenses: |
|
|
|
|
|
|
|
|
Property
operating |
|
11,859 |
|
|
11,916 |
|
|
36,950 |
|
|
35,454 |
|
Real
estate taxes |
|
10,826 |
|
|
10,690 |
|
|
32,384 |
|
|
32,327 |
|
General,
administrative, and other |
|
5,431 |
|
|
5,081 |
|
|
16,389 |
|
|
15,228 |
|
Transaction costs |
|
— |
|
|
— |
|
|
— |
|
|
2,771 |
|
Impairment charge |
|
— |
|
|
— |
|
|
7,411 |
|
|
— |
|
Depreciation and amortization |
|
42,793 |
|
|
45,543 |
|
|
131,333 |
|
|
131,625 |
|
Total
expenses |
|
70,909 |
|
|
73,230 |
|
|
224,467 |
|
|
217,405 |
|
Operating
income |
|
16,229 |
|
|
15,892 |
|
|
45,433 |
|
|
47,842 |
|
Interest
expense |
|
(16,372 |
) |
|
(17,139 |
) |
|
(49,250 |
) |
|
(47,964 |
) |
Income
tax benefit (expense) of taxable REIT subsidiary |
|
33 |
|
|
(15 |
) |
|
64 |
|
|
(763 |
) |
Other
expense, net |
|
(94 |
) |
|
— |
|
|
(314 |
) |
|
(94 |
) |
Loss from
continuing operations |
|
(204 |
) |
|
(1,262 |
) |
|
(4,067 |
) |
|
(979 |
) |
Gains on
sales of operating properties |
|
— |
|
|
— |
|
|
15,160 |
|
|
194 |
|
Net (loss)
income |
|
(204 |
) |
|
(1,262 |
) |
|
11,093 |
|
|
(785 |
) |
Net
income attributable to noncontrolling interests |
|
(418 |
) |
|
(420 |
) |
|
(1,528 |
) |
|
(1,391 |
) |
Net (loss)
income attributable to Kite Realty Group Trust common
shareholders |
|
$ |
(622 |
) |
|
$ |
(1,682 |
) |
|
$ |
9,565 |
|
|
$ |
(2,176 |
) |
|
|
|
|
|
|
|
|
|
(Loss) income
per common share - basic |
|
$ |
(0.01 |
) |
|
(0.02 |
) |
|
0.11 |
|
|
(0.03 |
) |
(Loss) income
per common share - diluted |
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
0.11 |
|
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding - basic |
|
83,594,163 |
|
|
83,474,348 |
|
|
83,581,847 |
|
|
83,399,813 |
|
Weighted average common
shares outstanding - diluted |
|
83,594,163 |
|
|
83,474,348 |
|
|
83,689,590 |
|
|
83,399,813 |
|
Cash dividends
declared per common share |
|
$ |
0.3025 |
|
|
$ |
0.2875 |
|
|
$ |
0.9075 |
|
|
$ |
0.8625 |
|
|
|
|
|
|
|
|
|
|
Kite Realty Group Trust |
Funds From Operations |
For the Three and Nine Months Ended September
30, 2017 and 2016 |
(Unaudited) |
|
($ in
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Funds From
Operations |
|
|
|
|
|
|
|
|
Consolidated net (loss)
income |
|
$ |
(204 |
) |
|
$ |
(1,262 |
) |
|
$ |
11,093 |
|
|
$ |
(785 |
) |
Less: net income
attributable to noncontrolling interests in properties |
|
(432 |
) |
|
(461 |
) |
|
(1,302 |
) |
|
(1,383 |
) |
Less: gains on sales of
operating properties |
|
— |
|
|
— |
|
|
(15,160 |
) |
|
(194 |
) |
Add: impairment
charge |
|
— |
|
|
— |
|
|
7,411 |
|
|
— |
|
Add: depreciation and
amortization of consolidated entities, net of noncontrolling
interests |
|
42,474 |
|
|
45,310 |
|
|
129,890 |
|
|
130,909 |
|
FFO of
the Operating Partnership1 |
|
41,838 |
|
|
43,587 |
|
|
131,932 |
|
|
128,547 |
|
Less: Limited Partners'
interests in FFO |
|
(949 |
) |
|
(918 |
) |
|
(2,995 |
) |
|
(2,708 |
) |
FFO
attributable to Kite Realty Group Trust common shareholders1 |
|
$ |
40,889 |
|
|
$ |
42,669 |
|
|
$ |
128,937 |
|
|
$ |
125,839 |
|
FFO, as defined by
NAREIT, per share of the Operating Partnership - basic |
|
$ |
0.49 |
|
|
$ |
0.51 |
|
|
$ |
1.54 |
|
|
$ |
1.51 |
|
FFO, as defined by
NAREIT, per share of the Operating Partnership - diluted |
|
$ |
0.49 |
|
|
$ |
0.51 |
|
|
$ |
1.54 |
|
|
$ |
1.50 |
|
|
|
|
|
|
|
|
|
|
FFO of the Operating
Partnership1 |
|
$ |
41,838 |
|
|
$ |
43,587 |
|
|
$ |
131,932 |
|
|
$ |
128,547 |
|
Add: accelerated
amortization of debt issuance costs (non-cash) |
|
— |
|
|
1,121 |
|
|
— |
|
|
1,121 |
|
Add: transaction
costs |
|
— |
|
|
— |
|
|
— |
|
|
2,771 |
|
Add: severance
charge |
|
— |
|
|
— |
|
|
— |
|
|
500 |
|
FFO, as adjusted, of
the Operating Partnership |
|
$ |
41,838 |
|
|
$ |
44,708 |
|
|
$ |
131,932 |
|
|
$ |
132,939 |
|
FFO, as adjusted, per
share of the Operating Partnership - basic |
|
$ |
0.49 |
|
|
$ |
0.52 |
|
|
$ |
1.54 |
|
|
$ |
1.56 |
|
FFO, as adjusted, per
share of the Operating Partnership - diluted |
|
$ |
0.49 |
|
|
$ |
0.52 |
|
|
$ |
1.54 |
|
|
$ |
1.56 |
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding - basic |
|
83,594,163 |
|
|
83,474,348 |
|
|
83,581,847 |
|
|
83,399,813 |
|
Weighted average common
shares outstanding - diluted |
|
83,708,719 |
|
|
83,565,227 |
|
|
83,689,590 |
|
|
83,488,618 |
|
Weighted average common
shares and units outstanding - basic |
|
85,580,993 |
|
|
85,417,753 |
|
|
85,561,343 |
|
|
85,336,859 |
|
Weighted average common
shares and units outstanding - diluted |
|
85,695,549 |
|
|
85,580,632 |
|
|
85,669,087 |
|
|
85,425,664 |
|
|
|
|
|
|
|
|
|
|
FFO, as defined by
NAREIT, per diluted share |
|
|
|
|
|
|
|
|
Consolidated net (loss)
income |
|
$ |
— |
|
|
$ |
(0.01 |
) |
|
$ |
0.13 |
|
|
$ |
(0.01 |
) |
Less: net income
attributable to noncontrolling interests in properties |
|
(0.01 |
) |
|
(0.01 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
Less: gains on sales of
operating properties |
|
— |
|
|
— |
|
|
(0.18 |
) |
|
— |
|
Add: impairment
charge |
|
— |
|
|
— |
|
|
0.09 |
|
|
— |
|
Add: depreciation and
amortization of consolidated entities, net of noncontrolling
interests |
|
0.50 |
|
|
0.53 |
|
|
1.52 |
|
|
1.53 |
|
FFO, as defined by
NAREIT, of the Operating Partnership per diluted share1 |
|
$ |
0.49 |
|
|
$ |
0.51 |
|
|
$ |
1.54 |
|
|
$ |
1.50 |
|
|
|
|
|
|
|
|
|
|
Add: accelerated
amortization of debt issuance costs |
|
— |
|
|
0.01 |
|
|
— |
|
|
0.01 |
|
Add: transaction
costs |
|
— |
|
|
— |
|
|
— |
|
|
0.04 |
|
Add: severance
charge |
|
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
FFO, as adjusted, of
the Operating Partnership per diluted share |
|
$ |
0.49 |
|
|
$ |
0.52 |
|
|
$ |
1.54 |
|
|
$ |
1.56 |
|
____________________ |
1 |
“FFO of the Operating
Partnership" measures 100% of the operating performance of the
Operating Partnership’s real estate properties. “FFO attributable
to Kite Realty Group Trust common shareholders” reflects a
reduction for the redeemable noncontrolling weighted average
diluted interest in the Operating Partnership. |
Funds from Operations (FFO) is a widely used
performance measure for real estate companies and is provided here
as a supplemental measure of operating performance. The Company
calculates FFO, a non-GAAP financial measure, in accordance with
the best practices described in the April 2002 National Policy
Bulletin of the National Association of Real Estate Investment
Trusts ("NAREIT"). The NAREIT white paper defines FFO as net income
(determined in accordance with GAAP), excluding gains (or losses)
from sales and impairments of depreciated property, plus
depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures.
Considering the nature of our business as a real
estate owner and operator, the Company believes that FFO is helpful
to investors in measuring our operational performance because it
excludes various items included in net income that do not relate to
or are not indicative of our operating performance, such as gains
or losses from sales of depreciated property and depreciation and
amortization, which can make periodic and peer analyses of
operating performance more difficult. For informational purposes,
the Company has also provided FFO adjusted for accelerated
amortization of debt issuance costs, transaction costs and a
severance charge in 2016. The Company believes this
supplemental information provides a meaningful measure of our
operating performance. The Company believes our presentation of
FFO, as adjusted, provides investors with another financial measure
that may facilitate comparison of operating performance between
periods and among our peer companies. FFO should not be considered
as an alternative to net income (determined in accordance with
GAAP) as an indicator of our financial performance, is not an
alternative to cash flow from operating activities (determined in
accordance with GAAP) as a measure of our liquidity, and is not
indicative of funds available to satisfy our cash needs, including
our ability to make distributions. Our computation of FFO may not
be comparable to FFO reported by other REITs that do not define the
term in accordance with the current NAREIT definition or that
interpret the current NAREIT definition differently than we do.
Kite Realty Group Trust |
Same Property Net Operating
Income |
For the Three and Nine Months Ended September
30, 2017 and 2016 |
(Unaudited) |
|
($ in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2017 |
|
2016 |
|
% Change |
|
2017 |
|
2016 |
|
% Change |
Number of properties
for the quarter1 |
|
104 |
|
|
|
104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased
percentage at period end |
94.4 |
% |
|
95.1 |
% |
|
|
|
94.4 |
% |
|
95.1 |
% |
|
|
Economic
Occupancy percentage2 |
93.5 |
% |
|
92.8 |
% |
|
|
|
93.7 |
% |
|
92.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rent |
$ |
58,806 |
|
|
$ |
56,997 |
|
|
|
|
$ |
175,615 |
|
|
$ |
170,713 |
|
|
|
Tenant recoveries |
16,014 |
|
|
15,320 |
|
|
|
|
49,073 |
|
|
46,961 |
|
|
|
Other income |
385 |
|
|
457 |
|
|
|
|
839 |
|
|
721 |
|
|
|
|
75,205 |
|
|
72,774 |
|
|
|
|
225,527 |
|
|
218,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses |
(10,136 |
) |
|
(10,041 |
) |
|
|
|
(29,883 |
) |
|
(28,956 |
) |
|
|
Real estate taxes |
(9,820 |
) |
|
(9,413 |
) |
|
|
|
(29,808 |
) |
|
(28,923 |
) |
|
|
|
(19,956 |
) |
|
(19,454 |
) |
|
|
|
(59,691 |
) |
|
(57,879 |
) |
|
|
Same Property
NOI3 |
$ |
55,249 |
|
|
$ |
53,320 |
|
|
3.6 |
% |
|
$ |
165,836 |
|
|
$ |
160,516 |
|
|
3.3 |
% |
Same Property
NOI - excluding the impact of the 3-R initiative4 |
|
|
|
|
3.9 |
% |
|
|
|
|
|
3.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Same
Property NOI to Most Directly Comparable GAAP Measure: |
|
|
|
|
|
|
|
|
|
|
|
Net operating income -
same properties |
$ |
55,249 |
|
|
$ |
53,320 |
|
|
|
|
$ |
165,836 |
|
|
$ |
160,516 |
|
|
|
Net operating income -
non-same activity5 |
9,614 |
|
|
13,561 |
|
|
|
|
36,611 |
|
|
38,191 |
|
|
|
Provision for bad debts
- same properties |
(410 |
) |
|
(365 |
) |
|
|
|
(1,881 |
) |
|
(1,241 |
) |
|
|
Other expense, net |
(61 |
) |
|
(15 |
) |
|
|
|
(250 |
) |
|
(857 |
) |
|
|
General, administrative
and other |
(5,431 |
) |
|
(5,081 |
) |
|
|
|
(16,389 |
) |
|
(15,228 |
) |
|
|
Transaction costs |
— |
|
|
— |
|
|
|
|
— |
|
|
(2,771 |
) |
|
|
Impairment charge |
— |
|
|
— |
|
|
|
|
(7,411 |
) |
|
— |
|
|
|
Depreciation and
amortization expense |
(42,793 |
) |
|
(45,543 |
) |
|
|
|
(131,333 |
) |
|
(131,625 |
) |
|
|
Interest expense |
(16,372 |
) |
|
(17,139 |
) |
|
|
|
(49,250 |
) |
|
(47,964 |
) |
|
|
Gains on sales of
operating properties |
— |
|
|
— |
|
|
|
|
15,160 |
|
|
194 |
|
|
|
Net income attributable
to noncontrolling interests |
(418 |
) |
|
(420 |
) |
|
|
|
(1,528 |
) |
|
(1,391 |
) |
|
|
Net (loss) income
attributable to common shareholders |
$ |
(622 |
) |
|
$ |
(1,682 |
) |
|
|
|
$ |
9,565 |
|
|
$ |
(2,176 |
) |
|
|
____________________ |
1 |
Same Property NOI
excludes eight properties in redevelopment, the recently completed
Northdale Promenade redevelopment as well as office properties
(Thirty South Meridian and Eddy Street Commons). |
2 |
Excludes leases that
are signed but for which tenants have not yet commenced the payment
of cash rent. Calculated as a weighted average based on the
timing of cash rent commencement and expiration during the
period. |
3 |
Same Property NOI
excludes net gains from outlot sales, straight-line rent revenue,
bad debt expense and recoveries, lease termination fees,
amortization of lease intangibles and significant prior period
expense recoveries and adjustments, if any. |
4 |
See pages 27 and 28 of
Q3 2017 supplemental for further detail of the properties included
in the 3-R initiative. |
5 |
Includes non-cash
activity across the portfolio as well as net operating income from
properties not included in the same property pool. |
The Company uses same property NOI ("Same Property
NOI"), a non-GAAP financial measure, to evaluate the performance of
our properties. Same Property NOI excludes properties that have not
been owned for the full period presented. It also excludes net
gains from outlot sales, straight-line rent revenue, bad debt
expense and recoveries, lease termination fees, amortization of
lease intangibles and significant prior period expense recoveries
and adjustments, if any. The Company believes that Same Property
NOI is helpful to investors as a measure of our operating
performance because it includes only the NOI of properties that
have been owned for the full period presented, which eliminates
disparities in net income due to the acquisition or disposition of
properties during the particular period presented and thus provides
a more consistent metric for the comparison of our properties. The
year to date results represent the sum of the individual quarters,
as reported.
NOI and Same Property NOI should not, however, be
considered as alternatives to net income (calculated in accordance
with GAAP) as indicators of our financial performance. Our
computation of NOI and Same Property NOI may differ from the
methodology used by other REITs, and therefore may not be
comparable to such other REITs.
When evaluating the properties that are included in
the same property pool, the Company has established specific
criteria for determining the inclusion of properties acquired or
those recently under development. An acquired property is included
in the same property pool when there is a full quarter of
operations in both years subsequent to the acquisition date.
Development and redevelopment properties are included in the same
property pool four full quarters after the properties have been
transferred to the operating portfolio. A redevelopment property is
first excluded from the same property pool when the execution of a
redevelopment plan is likely and the Company begins recapturing
space from tenants. For the quarter ended September 30, 2017,
the Company excluded eight redevelopment properties and the
recently completed Northdale Promenade redevelopment from the same
property pool that met these criteria and were owned in both
comparable periods.
Contact Information: Dan Sink EVP & CFO (317)
577-5609 dsink@kiterealty.com
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