Retail Value (NYSE:RVI)
Historical Stock Chart
6 Months : From Jun 2019 to Dec 2019
Retail Value Inc. (NYSE: RVI) today announced operating results for the quarter ended June 30, 2019.
Results for the Quarter
Second quarter net income attributable to common shareholders was $13.6 million, or $0.72 per diluted share. Second quarter operating funds from operations attributable to common shareholders (“Operating FFO” or “OFFO”) was $24.4 million, or $1.28 per diluted share.
Sold four shopping centers for an aggregate sales price of $151.5 million.
The Continental U.S. leased rate remained at 92.2%.
The Puerto Rico leased rate was 84.6% as compared to 85.3% at March 31, 2019 due to the Payless bankruptcy and natural lease expirations.
Key Quarterly Operating Results
The following metrics are as of June 30, 2019:
Shopping Center Count
Gross Leasable Area (thousands)
Base Rent PSF
RVI is an independent publicly traded company trading under the ticker symbol “RVI” on the New York Stock Exchange. RVI holds assets in the continental U.S. and Puerto Rico and is managed by one or more subsidiaries of SITE Centers Corp. RVI focuses on realizing value in its business through operations and sales of its assets. Additional information about RVI is available at www.retailvalueinc.com.
Funds from Operations (“FFO”) is a supplemental non-GAAP financial measure used as a standard in the real estate industry and is a widely accepted measure of real estate investment trust (“REIT”) performance. Management believes that both FFO and Operating FFO provide additional indicators of the financial performance of a REIT. The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group.
In December 2018, the National Association of Real Estate Investment Trusts (“NAREIT”) issued NAREIT Funds From Operations White Paper - 2018 Restatement (“the 2018 FFO White Paper”). The purpose of the 2018 FFO White Paper was not to change the fundamental definition of FFO but to clarify existing guidance and to consolidate into a single document, alerts and policy bulletins issued by NAREIT since the last FFO white paper was issued in 2002. The 2018 FFO White Paper was effective starting with first quarter 2019 reporting. The Company did not report any changes in the calculation of FFO in 2019 related to the clarification in the 2018 FFO White Paper.
FFO is generally defined and calculated by the Company as net income (loss) (computed in accordance with GAAP) adjusted to exclude (i) gains and losses from disposition of real estate property and related investments, which are presented net of taxes, if any, (ii) impairment charges on real estate property and related investments and (iii) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles. The Company’s calculation of FFO is consistent with the definition of FFO provided by NAREIT. The Company calculates Operating FFO by excluding certain non-operating charges and income. Operating FFO is useful to investors as the Company removes non-comparable charges and income to analyze the results of its operations and assess performance of the core operating real estate portfolio. Other real estate companies may calculate FFO and Operating FFO in a different manner.
The Company also uses net operating income (“NOI”), a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses. The Company believes NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level and, when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis.
FFO, Operating FFO and NOI do not represent cash generated from operating activities in accordance with GAAP, are not necessarily indicative of cash available to fund cash needs and should not be considered as alternatives to net income computed in accordance with GAAP as indicators of the Company’s operating performance or as alternatives to cash flow as a measure of liquidity. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in this release and the accompanying financial supplement.
RVI considers portions of the information in this press release to be 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, 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 our results to differ materially from those indicated by such forward-looking statements, including, among other factors, the ability to execute our strategy as an independent, publicly traded company. Other risks and uncertainties that could cause our results to differ materially from those indicated by such forward-looking statements include our ability to sell assets on commercially reasonable terms; our ability to complete dispositions of assets under contract; the success of our asset sale strategy; property damage, expenses related thereto and other business and economic consequences (including the potential loss of rental revenues) resulting from extreme weather conditions in locations where we own properties, and the ability to estimate accurately the amounts thereof; sufficiency and timing of any insurance recovery payments related to damages from extreme weather conditions; local conditions such as supply 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, significant downsizing of or bankruptcy of a major tenant and the impact of any such event on rental income from other tenants at our properties; our ability to secure equity or debt financing on commercially acceptable terms or at all; our ability to enter into definitive agreements with regard to our financing arrangements and our ability to satisfy conditions to the completion of these arrangements; unforeseen changes to the Puerto Rican economy and government; the ability to secure and maintain management services provided to us, including pursuant to our external management agreement with one or more subsidiaries of SITE Centers; and our ability to maintain our REIT status. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company’s most recent reports on Form 10-K and Form 10-Q. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
Retail Value Inc.
in thousands, except per share
Rental income (2)
Other property revenues
Business interruption income
Operating and maintenance (3)
Real estate taxes
Net operating income (4)
Other income (expense):
Asset management fees
Depreciation and amortization
General and administrative
Hurricane property insurance income, net
Debt extinguishment costs, net
Other expense, net
Gain on disposition of real estate, net (5)
Income before other items
Weighted average shares – Basic & Diluted – EPS
Earnings per common share – Basic & Diluted
Lost revenue related to hurricane
Ground lease minimum rents
Percentage and overage rent
Lease termination fees
Ancillary and other rental income
Property management fees
NOI from assets sold
SITE Centers disposition fees
Retail Value Inc.
Reconciliation: Net Income to FFO and Operating FFO and Other Financial Information
in thousands, except per share
Net income attributable to Common Shareholders
Depreciation and amortization of real estate
Impairment of real estate
Gain on disposition of real estate, net
FFO attributable to Common Shareholders
Hurricane activity, net (1)
Debt extinguishment, transaction, other, net
Total non-operating items, net
Operating FFO attributable to Common Shareholders
Weighted average shares and units – Basic & Diluted – FFO & OFFO
FFO per share – Basic & Diluted
Operating FFO per share – Basic & Diluted
Common stock dividends declared, per share
Certain non-cash items:
Straight-line fixed CAM
Loan cost amortization
Non-real estate depreciation expense
Maintenance capital expenditures
Tenant allowances and landlord work
Leasing commissions - SITE Centers
Leasing commissions - external
Hurricane activity, net:
Lost tenant revenue
Property insurance proceeds in excess of receivable
Business interruption income
Clean up costs and other expenses
Retail Value Inc.
$ in thousands
At Period End
Fixtures and tenant improvements
Construction in progress and land
Real estate, net
Restricted cash (1)
Receivables and straight-line (2)
Property insurance receivable
Intangible assets, net (3)
Other assets, net
Liabilities and Equity:
Payable to SITE
Other liabilities (4)
Redeemable preferred equity
Distributions in excess of net income
Common shares in treasury at cost
Total Liabilities and Equity
Asset sale proceeds
Straight-line rents receivable
Operating lease right of use assets (related to adoption of Topic 842)
Operating lease liabilities (related to adoption of Topic 842)
Below-market leases, net
View source version on businesswire.com: https://www.businesswire.com/news/home/20190806005660/en/
Matthew Ostrower, EVP and Chief Financial Officer