Ramco-Gershenson Properties Trust (NYSE:RPT) today
announced its financial and operating results for the three and
twelve months ended December 31, 2017.
FOURTH QUARTER FINANCIAL AND OPERATING
RESULTS:
- Net income available to common shareholders of $0.24 per
diluted share, compared to $0.07 per diluted share for the same
period in 2016.
- Funds from Operations ("FFO") of $0.30 per diluted share,
compared to $0.33 per diluted share for the same period in
2016.
- Operating Funds from Operations (“Operating FFO”) of $0.31 per
diluted share, compared to $0.34 per diluted share for the same
period in 2016.
- Generated same property NOI growth with redevelopment of 2.3%
for the three months ended December 31, 2017.
- Sold $101.4 million of non-core shopping centers.
- Signed 40 comparable leases encompassing 206,502 square feet at
a positive leasing spread of 8.9% with an annualized base rent
("ABR") of $14.47 per square feet, including seven new leases with
an ABR of $18.06 per square feet and positive leasing spread of
16.8%.
- Increased ABR to $15.16 per square foot, excluding ground
leases, compared to $14.20 for the same period in 2016.
2017 FULL-YEAR
HIGHLIGHTS:
- Generated same-center NOI growth with redevelopment of 2.4% for
the twelve months ended December 31, 2017.
- Signed 186 comparable leases encompassing 1,073,197 square feet
at a positive leasing spread of 8.8%, including 24 new leases with
an ABR of $19.38 per square feet and positive leasing spread of
18.0%.
- Acquired one dynamic town center and one urban in-fill property
for a purchase price totaling $168.3 million.
- Sold $225.7 million of non-core shopping centers.
- Completed approximately $15.5 million in redevelopment
projects.
- Posted portfolio leased occupancy of 93.3%, compared to 94.4%
for the same period in 2016, primarily the result of bankruptcy
closures in 2017.
- Reduced Michigan rental exposure to 20.0% of total ABR.
"In 2017, we completed the sale of $226 million
of non-core properties diversifying our portfolio in strategic
non-coastal markets,” said Dennis Gershenson, President and
Chief Executive Officer. “In 2018, our focus is on operating
fundamentals, including growing occupancy, increasing our portfolio
ABR and completing in-process redevelopment projects to maximize
the value of our rebalanced portfolio."
FINANCIAL RESULTS:
For the three months ended December 31,
2017:
- Net income available to common shareholders of $19.2 million,
or $0.24 per diluted share, compared to $5.2 million, or $0.07 per
diluted share for the same period in 2016.
- FFO of $26.5 million, or $0.30 per diluted share, compared to
$29.1 million, or $0.33 per diluted share for the same period in
2016.
- Operating FFO of $27.7 million, or $0.31 per diluted share,
compared to $29.5 million or $0.34 per diluted share for the same
period in 2016.
For the twelve months ended December 31,
2017:
- Net income available to common shareholders of $62.4 million,
or $0.78 per diluted share, compared to $53.0 million, or $0.66 per
diluted share for the same period in 2016.
- FFO of $118.6 million, or $1.34 per diluted share, compared to
$118.7 million, or $1.35 per diluted share for the same period in
2016.
- Operating FFO of $119.6 million, or $1.36 per diluted share,
compared to $119.9 million or $1.36 per diluted share for the same
period in 2016.
BALANCE SHEET METRICS AND CAPITAL MARKETS
ACTIVITY:
- Net debt to annualized proforma adjusted EBITDA of 6.7X,
interest coverage of 3.6X, and fixed charge coverage of 3.0X.
INVESTMENT
ACTIVITY:Dispositions
During the fourth quarter, the Company sold four
shopping centers which are not part of the Company’s long-term
portfolio strategy, at a gross sales price of $101.4 million. The
properties sold are:
- Millennium Park Livonia, Michigan, a 273,000 square foot power
center anchored by Meijer (shadow), Costco (shadow), The Home
Depot, Marshalls, Michaels and Five Below;
- Village Plaza, Lakeland, Florida, a 158,000 square foot center
anchored by Hobby Lobby, Big Lots and Party City;
- Liberty Square, Wauconda, Illinois, a 107,000 square foot
Jewel-Osco anchored center; and
- Rolling Meadows, Rolling Meadows, Illinois, a 134,000 square
foot Jewel-Osco anchored center.
The Company’s total shopping center dispositions
for the year totaled $225.7 million.
Redevelopment
At December 31, 2017, the Company's active
redevelopment pipeline consisted of seven projects with an
estimated total cost of $73.7 million, which are expected to
stabilize in 2018 at an estimated weighted average return on cost
of between 9% - 10%.
FINANCING ACTIVITY:
The Company closed a $75.0 million private
placement of senior unsecured notes in December 2017. The
notes were issued in three tranches with terms of 5, 10, and 12
years and a weighted average interest rate of 4.46%. Proceeds
were used to pay off two mortgages totaling $36.7 million with an
average interest rate of 4.64% as well as for general corporate
purposes.
In addition, during the quarter, the Company
amended and repriced its $75.0 million term loan due 2021.
The transaction reduced the loan's interest rate by 35 basis points
for the remainder of the term.
DIVIDEND:
In the fourth quarter, the Company declared a
regular cash dividend of $0.22 per common share for the period
October 1, 2017 through December 31, 2017 and a Series D
convertible perpetual preferred share dividend of $0.90625 per
share for the same period. The dividends were paid on January
2, 2018 to shareholders of record as of December 20,
2017. During the year, the Company declared dividends of
$0.88 per common share. The Operating FFO payout ratio for the full
year was 64.7%.
GUIDANCE:
The Company affirmed its 2018 FFO and Operating
FFO guidance of $1.31 to $1.37 per share, as well as certain other
key assumptions:
- Same Property NOI growth including redevelopment of 2.25% to
3.75%.
- Redevelopment Expenditures of $40.0 to $50.0 million.
- Year End Physical Occupancy of 93% - 94%.
|
|
|
|
|
Measure |
|
Low |
|
High |
Cash NOI |
|
$1.99 |
|
$2.02 |
Non-cash
adjustments |
|
0.08 |
|
0.08 |
General and
administrative |
|
(0.26) |
|
(0.24) |
Interest expense |
|
(0.50) |
|
(0.49) |
Total Operating
FFO |
|
$1.31 |
|
$1.37 |
|
|
|
|
|
CONFERENCE CALL/WEBCAST:
Ramco-Gershenson Properties Trust will host a
live broadcast of its fourth quarter conference call on Wednesday,
February 21, 2018 at 10:00 a.m. eastern time, to discuss its
financial and operating results as well as its 2018 guidance.
The live broadcast will be available on-line at www.rgpt.com and
www.investorcalendar.com and also by telephone at (877) 407-9205,
no pass code needed. A replay will be available shortly after
the call on the aforementioned websites (for ninety days) or by
telephone at (877) 481-4010, (Conference ID: 23919) through
February 28, 2018.
SUPPLEMENTAL MATERIALS:
The Company’s quarterly financial and operating
supplement is available on its corporate web site at
www.rgpt.com. If you wish to receive a copy via email, please
send requests to dhendershot@rgpt.com.
ABOUT RAMCO-GERSHENSON PROPERTIES
TRUST:
Ramco-Gershenson Properties Trust (NYSE:RPT) is
a premier, national publicly-traded shopping center real estate
investment trust (REIT) based in Farmington Hills, Michigan.
The Company's primary business is the ownership and
management of regional dominant and urban-oriented, infill shopping
centers in key growth markets in the 40 largest metropolitan
markets in the United States. At December 31, 2017, the
Company owned interests in and managed a portfolio of 56 shopping
centers and three joint venture properties. At December 31,
2017, the Company's consolidated portfolio was 93.3% leased.
Ramco-Gershenson is a fully-integrated qualified REIT that is
self-administered and self-managed. For additional information
about the Company please visit www.rgpt.com or follow
Ramco-Gershenson on Twitter @RamcoGershenson and
facebook.com/ramcogershenson/. This press release may contain
forward-looking statements that represent the Company’s
expectations and projections for the future. Management of
Ramco-Gershenson believes the expectations reflected in any
forward-looking statements made in this press release are based on
reasonable assumptions. Certain factors could occur that might
cause actual results to vary, including deterioration in national
economic conditions, weakening of real estate markets, decreases in
the availability of credit, increases in interest rates, adverse
changes in the retail industry, our continuing ability to qualify
as a REIT and other factors discussed in the Company’s reports
filed with the Securities and Exchange Commission.
Company Contact:Dawn L. Hendershot,
Senior Vice President Investor Relations and Public
Affairs31500 Northwestern Highway, Suite
300Farmington Hills, MI
48334dhendershot@rgpt.com (248)
592-6202
RAMCO-GERSHENSON PROPERTIES TRUST |
CONSOLIDATED BALANCE SHEETS |
(In thousands, except per share
amounts) |
|
|
|
|
|
December 31, 2017 |
|
December 31, 2016 |
|
|
|
|
|
|
(as revised) |
|
ASSETS |
|
|
|
Income producing
properties, at cost: |
|
|
|
Land |
$ |
397,935 |
|
|
$ |
374,889 |
|
Buildings
and improvements |
1,732,844 |
|
|
1,757,781 |
|
Less
accumulated depreciation and amortization |
(351,632 |
) |
|
(345,204 |
) |
Income producing
properties, net |
1,779,147 |
|
|
1,787,466 |
|
Construction in progress and land available for development or
sale |
58,243 |
|
|
61,224 |
|
Real
estate held for sale |
— |
|
|
8,776 |
|
Net real estate |
1,837,390 |
|
|
1,857,466 |
|
Equity investments in
unconsolidated joint ventures |
3,493 |
|
|
3,150 |
|
Cash and cash
equivalents |
8,081 |
|
|
3,582 |
|
Restricted cash and
escrows |
4,810 |
|
|
11,144 |
|
Accounts receivable,
net |
26,145 |
|
|
24,016 |
|
Acquired lease
intangibles, net |
59,559 |
|
|
72,424 |
|
Other assets, net |
90,916 |
|
|
89,716 |
|
TOTAL
ASSETS |
$ |
2,030,394 |
|
|
$ |
2,061,498 |
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
Notes payable, net |
$ |
999,215 |
|
|
$ |
1,021,223 |
|
Capital lease
obligation |
1,022 |
|
|
1,066 |
|
Accounts payable and
accrued expenses |
56,750 |
|
|
57,357 |
|
Acquired lease
intangibles, net |
60,197 |
|
|
63,734 |
|
Other liabilities |
8,375 |
|
|
9,893 |
|
Distributions
payable |
19,666 |
|
|
19,627 |
|
TOTAL
LIABILITIES |
1,145,225 |
|
|
1,172,900 |
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
Ramco-Gershenson Properties Trust ("RPT") Shareholders'
Equity: |
|
|
|
Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series
D Cumulative Convertible Perpetual Preferred Shares, (stated at
liquidation preference $50 per share), 1,849 shares issued and
outstanding as of December 31, 2017 and 2016, respectively |
92,427 |
|
|
92,427 |
|
Common shares of beneficial interest, $0.01 par, 120,000 shares
authorized, 79,366 and 79,272 shares issued and outstanding as of
December 31, 2017 and 2016, respectively |
794 |
|
|
793 |
|
Additional paid-in
capital |
1,160,862 |
|
|
1,158,430 |
|
Accumulated
distributions in excess of net income |
(392,619 |
) |
|
(384,934 |
) |
Accumulated other
comprehensive income |
2,858 |
|
|
985 |
|
TOTAL
SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT |
864,322 |
|
|
867,701 |
|
Noncontrolling
interest |
20,847 |
|
|
20,897 |
|
TOTAL
SHAREHOLDERS' EQUITY |
885,169 |
|
|
888,598 |
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
2,030,394 |
|
|
$ |
2,061,498 |
|
|
|
|
|
|
|
|
|
RAMCO-GERSHENSON PROPERTIES
TRUST |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
Three Months |
|
Twelve Months |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
REVENUE |
|
|
|
|
|
|
|
|
Minimum
rent |
$ |
48,392 |
|
|
$ |
48,253 |
|
|
$ |
198,362 |
|
|
$ |
192,793 |
|
|
Percentage rent |
134 |
|
|
90 |
|
|
704 |
|
|
600 |
|
|
Recovery
income from tenants |
14,603 |
|
|
14,774 |
|
|
61,258 |
|
|
62,841 |
|
|
Other
property income |
993 |
|
|
1,239 |
|
|
4,303 |
|
|
4,167 |
|
|
Management and other fee income |
141 |
|
|
98 |
|
|
455 |
|
|
529 |
|
|
TOTAL
REVENUE |
64,263 |
|
|
64,454 |
|
|
265,082 |
|
|
260,930 |
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
Real
estate tax expense |
10,012 |
|
|
10,029 |
|
|
42,683 |
|
|
41,739 |
|
|
Recoverable operating expense |
6,954 |
|
|
8,355 |
|
|
27,653 |
|
|
29,581 |
|
|
Non-recoverable operating expense |
1,233 |
|
|
1,014 |
|
|
4,449 |
|
|
3,575 |
|
|
Depreciation and amortization |
22,053 |
|
|
21,986 |
|
|
91,335 |
|
|
91,793 |
|
|
Acquisition costs |
— |
|
|
198 |
|
|
— |
|
|
316 |
|
|
General
and administrative expense |
7,383 |
|
|
4,967 |
|
|
26,159 |
|
|
22,041 |
|
|
Provision
for impairment |
982 |
|
|
— |
|
|
9,404 |
|
|
977 |
|
|
TOTAL
EXPENSES |
48,617 |
|
|
46,549 |
|
|
201,683 |
|
|
190,022 |
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME |
15,646 |
|
|
17,905 |
|
|
63,399 |
|
|
70,908 |
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
AND EXPENSES |
|
|
|
|
|
|
|
|
Other
expense, net |
(96 |
) |
|
129 |
|
|
(708 |
) |
|
(177 |
) |
|
Gain on
sale of real estate |
16,843 |
|
|
96 |
|
|
52,764 |
|
|
35,781 |
|
|
Earnings
from unconsolidated joint ventures |
50 |
|
|
117 |
|
|
273 |
|
|
454 |
|
|
Interest
expense |
(10,995 |
) |
|
(10,696 |
) |
|
(44,866 |
) |
|
(44,514 |
) |
|
Other
gain on unconsolidated joint ventures |
— |
|
|
— |
|
|
— |
|
|
215 |
|
|
(Loss) on
extinguishment of debt |
— |
|
|
(409 |
) |
|
— |
|
|
(1,256 |
) |
|
INCOME BEFORE
TAX |
21,448 |
|
|
7,142 |
|
|
70,862 |
|
|
61,411 |
|
|
Income
tax provision |
(24 |
) |
|
(65 |
) |
|
(143 |
) |
|
(299 |
) |
|
|
|
|
|
|
|
|
|
|
NET
INCOME |
21,424 |
|
|
7,077 |
|
|
70,719 |
|
|
61,112 |
|
|
Net
income attributable to noncontrolling partner interest |
(501 |
) |
|
(166 |
) |
|
(1,659 |
) |
|
(1,448 |
) |
|
NET INCOME
ATTRIBUTABLE TO RPT |
20,923 |
|
|
6,911 |
|
|
69,060 |
|
|
59,664 |
|
|
Preferred
share dividends |
(1,675 |
) |
|
(1,676 |
) |
|
(6,701 |
) |
|
(6,701 |
) |
|
NET INCOME
AVAILABLE TO COMMON SHAREHOLDERS |
$ |
19,248 |
|
|
$ |
5,235 |
|
|
$ |
62,359 |
|
|
$ |
52,963 |
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON SHARE |
|
|
|
|
|
|
|
|
Basic |
$ |
0.24 |
|
|
$ |
0.07 |
|
|
$ |
0.78 |
|
|
$ |
0.66 |
|
|
Diluted |
$ |
0.24 |
|
|
$ |
0.07 |
|
|
$ |
0.78 |
|
|
$ |
0.66 |
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
Basic |
79,366 |
|
|
79,268 |
|
|
79,344 |
|
|
79,236 |
|
|
Diluted |
79,550 |
|
|
79,461 |
|
|
79,530 |
|
|
79,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAMCO-GERSHENSON PROPERTIES
TRUST |
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES |
FUNDS FROM OPERATIONS |
(In thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
Net income |
$ |
21,424 |
|
|
$ |
7,077 |
|
|
$ |
70,719 |
|
|
$ |
61,112 |
|
Net income attributable
to noncontrolling partner interest |
(501 |
) |
|
(166 |
) |
|
(1,659 |
) |
|
(1,448 |
) |
Preferred share
dividends |
(1,675 |
) |
|
(1,676 |
) |
|
(6,701 |
) |
|
(6,701 |
) |
Net income available to
common shareholders |
19,248 |
|
|
5,235 |
|
|
62,359 |
|
|
52,963 |
|
Adjustments: |
|
|
|
|
|
|
|
Rental
property depreciation and amortization expense |
21,993 |
|
|
21,931 |
|
|
91,097 |
|
|
91,610 |
|
Pro-rata
share of real estate depreciation from unconsolidated joint
ventures |
73 |
|
|
73 |
|
|
302 |
|
|
310 |
|
Gain on
sale of depreciable real estate |
(16,945 |
) |
|
— |
|
|
(51,977 |
) |
|
(34,108 |
) |
Gain on
sale of joint venture depreciable real estate |
— |
|
|
— |
|
|
— |
|
|
(26 |
) |
Provision
for impairment on income-producing properties |
— |
|
|
— |
|
|
8,422 |
|
|
— |
|
Other
gain on unconsolidated joint ventures |
— |
|
|
— |
|
|
— |
|
|
(215 |
) |
FFO available
to common shareholders |
24,369 |
|
|
27,239 |
|
|
110,203 |
|
|
110,534 |
|
|
|
|
|
|
|
|
|
Noncontrolling interest in Operating Partnership (1) |
501 |
|
|
166 |
|
|
1,659 |
|
|
1,448 |
|
Preferred
share dividends (assuming conversion) (2) |
1,675 |
|
|
1,676 |
|
|
6,701 |
|
|
6,701 |
|
FFO available
to common shareholders and dilutive securities |
$ |
26,545 |
|
|
$ |
29,081 |
|
|
$ |
118,563 |
|
|
$ |
118,683 |
|
|
|
|
|
|
|
|
|
(Gain)
loss on sale of land |
102 |
|
|
(96 |
) |
|
(787 |
) |
|
(1,673 |
) |
Provision
for impairment on land available for development or sale |
982 |
|
|
— |
|
|
982 |
|
|
977 |
|
Severance
expense |
60 |
|
|
43 |
|
|
715 |
|
|
492 |
|
Loss on
early extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
1,256 |
|
Acquisition costs |
— |
|
|
198 |
|
|
— |
|
|
316 |
|
Cost
associated with early extinguishment of debt |
30 |
|
|
281 |
|
|
110 |
|
|
(128 |
) |
Operating FFO
available to common shareholders and dilutive
securities |
$ |
27,719 |
|
|
$ |
29,507 |
|
|
$ |
119,583 |
|
|
$ |
119,923 |
|
|
|
|
|
|
|
|
|
Weighted average common
shares |
79,366 |
|
|
79,268 |
|
|
79,344 |
|
|
79,236 |
|
Shares issuable upon
conversion of Operating Partnership Units (1) |
1,916 |
|
|
1,917 |
|
|
1,917 |
|
|
1,943 |
|
Dilutive effect of
restricted stock |
184 |
|
|
193 |
|
|
186 |
|
|
199 |
|
Shares issuable upon
conversion of preferred shares (2) |
6,740 |
|
|
6,630 |
|
|
6,740 |
|
|
6,630 |
|
Weighted
average equivalent shares outstanding, diluted |
88,206 |
|
|
88,008 |
|
|
88,187 |
|
|
88,008 |
|
|
|
|
|
|
|
|
|
FFO available
to common shareholders and dilutive securities per share,
diluted |
$ |
0.30 |
|
|
$ |
0.33 |
|
|
$ |
1.34 |
|
|
$ |
1.35 |
|
|
|
|
|
|
|
|
|
Operating FFO
available to common shareholders and dilutive securities per share,
diluted |
$ |
0.31 |
|
|
$ |
0.34 |
|
|
$ |
1.36 |
|
|
$ |
1.36 |
|
|
|
|
|
|
|
|
|
Dividend per common
share |
$ |
0.22 |
|
|
$ |
0.22 |
|
|
$ |
0.88 |
|
|
$ |
0.86 |
|
Payout ratio -
Operating FFO |
71.0 |
% |
|
64.7 |
% |
|
64.7 |
% |
|
63.2 |
% |
|
|
|
|
|
|
|
|
(1) The total noncontrolling interest reflects OP units
convertible 1:1 into common shares.
(2) Series D convertible preferred shares
are paid annual dividends of $6.7 million and are currently
convertible into approximately 6.7 million shares of common stock.
They are dilutive only when earnings or FFO exceed approximately
$0.25 per diluted share per quarter and $1.00 per diluted share per
year. The conversion ratio is subject to adjustment based
upon a number of factors, and such adjustment could affect the
dilutive impact of the Series D convertible preferred shares on FFO
and earning per share in future periods.
|
|
RAMCO-GERSHENSON PROPERTIES
TRUSTRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(amounts in thousands) |
|
Reconciliation of net income available to common
shareholders to Same Property NOI |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income available to
common shareholders |
$ |
19,248 |
|
|
$ |
5,235 |
|
|
$ |
62,359 |
|
|
$ |
52,963 |
|
Preferred
share dividends |
1,675 |
|
|
1,676 |
|
|
6,701 |
|
|
6,701 |
|
Net
income attributable to noncontrolling partner interest |
501 |
|
|
166 |
|
|
1,659 |
|
|
1,448 |
|
Income
tax provision |
24 |
|
|
65 |
|
|
143 |
|
|
299 |
|
Interest
expense |
10,995 |
|
|
10,696 |
|
|
44,866 |
|
|
44,514 |
|
Costs
associated with early extinguishment of debt |
— |
|
|
409 |
|
|
— |
|
|
1,256 |
|
Earnings
from unconsolidated joint ventures |
(50 |
) |
|
(117 |
) |
|
(273 |
) |
|
(454 |
) |
Gain on
sale of real estate |
(16,843 |
) |
|
(96 |
) |
|
(52,764 |
) |
|
(35,781 |
) |
Gain on
remeasurement of unconsolidated joint venture |
— |
|
|
— |
|
|
— |
|
|
(215 |
) |
Other
expense, net |
96 |
|
|
(129 |
) |
|
708 |
|
|
177 |
|
Management and other fee income |
(141 |
) |
|
(98 |
) |
|
(455 |
) |
|
(529 |
) |
Depreciation and amortization |
22,053 |
|
|
21,986 |
|
|
91,335 |
|
|
91,793 |
|
Acquisition costs |
— |
|
|
198 |
|
|
— |
|
|
316 |
|
General
and administrative expenses |
7,383 |
|
|
4,967 |
|
|
26,159 |
|
|
22,041 |
|
Provision
for impairment |
982 |
|
|
— |
|
|
9,404 |
|
|
977 |
|
Lease
termination fees |
(23 |
) |
|
(71 |
) |
|
(83 |
) |
|
(139 |
) |
Amortization of lease inducements |
44 |
|
|
44 |
|
|
175 |
|
|
221 |
|
Amortization of acquired above and below market lease intangibles,
net |
(1,130 |
) |
|
(1,069 |
) |
|
(4,397 |
) |
|
(3,397 |
) |
Straight-line ground rent expense |
70 |
|
|
63 |
|
|
281 |
|
|
63 |
|
Amortization of acquired ground lease intangibles |
6 |
|
|
6 |
|
|
25 |
|
|
6 |
|
Straight-line rental income |
(872 |
) |
|
(948 |
) |
|
(2,669 |
) |
|
(2,383 |
) |
NOI |
44,018 |
|
|
42,983 |
|
|
183,174 |
|
|
179,877 |
|
NOI from
Other Investments |
(4,951 |
) |
|
(4,788 |
) |
|
(25,529 |
) |
|
(25,866 |
) |
Same Property NOI with
Redevelopment |
39,067 |
|
|
38,195 |
|
|
157,645 |
|
|
154,011 |
|
NOI from
Redevelopment (1) |
(6,016 |
) |
|
(5,850 |
) |
|
(23,991 |
) |
|
(21,954 |
) |
Same Property NOI
without Redevelopment |
$ |
33,051 |
|
|
$ |
32,345 |
|
|
$ |
133,654 |
|
|
$ |
132,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The NOI from Redevelopment adjustments represent
100% of the NOI related to Deerfield Towne Center, Hunter’s Square,
Woodbury Lakes and West Oaks, and a portion of the NOI
related to specific GLA at Spring Meadows, The Shoppes at Fox River
II, The Shops on Lane Avenue, Mission Bay, River City Marketplace
and Town & Country for the periods presented. Because of
the redevelopment activity, the center or specific space is not
considered comparable for the periods presented and adjusted out of
Same Property NOI with Redevelopment in arriving at Same Property
NOI without Redevelopment. |
|
|
|
|
|
|
|
|
|
RAMCO-GERSHENSON PROPERTIES
TRUSTRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(amounts in thousands) |
|
|
Three Months Ended December 31, |
|
2017 |
|
2016 |
Reconciliation
of net income to proforma adjusted EBITDA |
|
|
|
Net income |
$ |
21,424 |
|
|
$ |
7,077 |
|
Gain on sale of real
estate |
(16,843 |
) |
|
(96 |
) |
Depreciation and
amortization |
22,053 |
|
|
21,986 |
|
Pro-rata share of
depreciation from unconsolidated joint venture |
73 |
|
|
73 |
|
Provision for
impairment |
982 |
|
|
— |
|
Severance expense |
60 |
|
|
43 |
|
Costs associated with
early extinguishment of debt |
— |
|
|
409 |
|
Interest expense |
10,995 |
|
|
10,696 |
|
Income tax
provision |
24 |
|
|
65 |
|
Lease termination
income |
(23 |
) |
|
(71 |
) |
Acquisition costs |
— |
|
|
198 |
|
Adjusted EBITDA |
38,745 |
|
|
40,380 |
|
Proforma adjustments
(1) |
(1,324 |
) |
|
(251 |
) |
Proforma adjusted
EBITDA |
$ |
37,421 |
|
|
$ |
40,129 |
|
Annualized proforma
adjusted EBITDA |
$ |
149,684 |
|
|
$ |
160,516 |
|
|
|
|
|
|
|
|
|
Reconciliation
of Notes Payable, net to Net Debt |
|
|
|
Notes payable, net |
$ |
999,215 |
|
|
$ |
1,021,223 |
|
Unamortized
premium |
(3,967 |
) |
|
(5,120 |
) |
Deferred financing
costs, net |
3,821 |
|
|
3,740 |
|
Consolidated notional
debt |
999,069 |
|
|
1,019,843 |
|
Pro-rata share of debt
from unconsolidated joint venture |
12,699 |
|
|
— |
|
Capital lease
obligation |
1,022 |
|
|
1,066 |
|
Cash and cash
equivalents |
(8,081 |
) |
|
(3,582 |
) |
Net debt |
$ |
1,004,709 |
|
|
$ |
1,017,327 |
|
|
|
|
|
|
|
|
|
Reconciliation
of interest expense to total fixed charges |
|
|
|
Interest expense |
$ |
10,616 |
|
|
$ |
10,351 |
|
Preferred share
dividends |
1,675 |
|
|
1,676 |
|
Scheduled mortgage
principal payments |
758 |
|
|
777 |
|
Total fixed
charges |
$ |
13,049 |
|
|
$ |
12,804 |
|
|
|
|
|
|
|
|
|
Net debt to annualized
proforma adjusted EBITDA |
6.7 |
X |
|
6.3 |
X |
Interest coverage ratio
(Adjusted EBITDA / interest expense) |
3.6 |
X |
|
3.9 |
X |
Fixed
charge coverage ratio (Adjusted EBITDA / fixed charges) |
3.0 |
X |
|
3.2 |
X |
|
|
|
|
(1) 4Q17 excludes $1.3 million from acquisitions and
dispositions including our Millennium Park joint venture.
4Q16 excludes $0.3 million related to miscellaneous income. |
|
Ramco-Gershenson Properties
TrustNon-GAAP Financial Definitions
Certain of our key performance indicators are
considered non-GAAP financial measures. Management uses these
measures along with our GAAP financial statements in order to
evaluate our operations results. We believe these additional
measures provide users of our financial information additional
comparable indicators of our industry, as well as our
performance.
Funds From Operations (FFO) Available to
Common Shareholders
As defined by the National Association of Real
Estate Investment Trusts (NAREIT), Funds From Operations (FFO)
represents net income computed in accordance with generally
accepted accounting principles, excluding gains (or losses) from
sales of depreciable property and impairment provisions on
depreciable real estate or on investments in non-consolidated
investees that are driven by measurable decreases in the fair value
of depreciable real estate held by the investee, plus depreciation
and amortization, (excluding amortization of financing
costs). Adjustments for unconsolidated partnerships and joint
ventures are calculated to reflect funds from operations on the
same basis. We have adopted the NAREIT definition in our
computation of FFO available to common shareholders.
Operating FFO Available to Common
Shareholders
In addition to FFO available to common
shareholders, we include Operating FFO available to common
shareholders as an additional measure of our financial and
operating performance. Operating FFO excludes acquisition
costs and periodic items such as gains (or losses) from sales of
land and impairment provisions on land available for development or
sale, bargain purchase gains, severance expense, accelerated
amortization of debt premiums and gains or losses on extinguishment
of debt that are not adjusted under the current NAREIT definition
of FFO. We provide a reconciliation of FFO to Operating FFO.
FFO and Operating FFO should not be considered alternatives to GAAP
net income available to common shareholders or as alternatives to
cash flow as measures of liquidity.
While we consider FFO available to common
shareholders and Operating FFO available to common shareholders
useful measures for reviewing our comparative operating and
financial performance between periods or to compare our performance
to different REITs, our computations of FFO and Operating FFO may
differ from the computations utilized by other real estate
companies, and therefore, may not be comparable. We
recognize the limitations of FFO and
Operating FFO when compared to GAAP net
income available to common shareholders. FFO and Operating
FFO available to common shareholders do not represent amounts
available for needed capital replacement or expansion, debt service
obligations, or other commitments and uncertainties. In addition,
FFO and Operating FFO do not represent cash generated from
operating activities in accordance with GAAP and are not
necessarily indicative of cash available to fund cash needs,
including the payment of dividends. FFO and Operating FFO are
simply used as for reviewing our comparative operating and
financial performance between periods or to compare our performance
to different REITs, our computations of FFO and Operating FFO may
differ from the computations utilized by other real estate
companies, and therefore, may not be comparable.
Adjusted EBITDA/Proforma Adjusted
EBITDA
Adjusted EBITDA is net income or loss plus
depreciation and amortization, interest expense net of deferred
financing costs, severance expense, income taxes, gain or loss on
sale of real estate, and impairments of real estate, if any.
Adjusted EBITDA should not be considered an alternative measure of
operating results or cash flow from operations as determined in
accordance with GAAP. Proforma Adjusted EBITDA further
adjusts for the effect of the acquisition or disposition of
properties during the period.
Same Property Operating
Income
Same Property Operating Income ("Same Property
NOI with Redevelopment") is a supplemental non-GAAP financial
measure of real estate companies' operating performance. Same
Property NOI with Redevelopment is considered by management to be a
relevant performance measure of our operations because it includes
only the NOI of comparable properties for the reporting
period. Same Property NOI with Redevelopment excludes
acquisitions and dispositions. Same Property NOI with
Redevelopment is calculated using consolidated operating income and
adjusted to exclude management and other fee income, depreciation
and amortization, general and administrative expense, provision for
impairment and non-comparable income/expense adjustments such as
straight-line rents, lease termination fees, above/below market
rents, and other non-comparable operating income and expense
adjustments.
In addition to Same Property NOI with
Redevelopment, the Company also believes Same Property NOI without
Redevelopment to be a relevant performance measure of our
operations. Same Property NOI without Redevelopment follows
the same methodology as Same Property NOI with Redevelopment,
however it excludes redevelopment activity that significantly
impacts the entire property, as well as lesser redevelopment
activity where we are adding GLA or retenanting a specific
space. A property is designated as redevelopment when
projected costs exceed $1.0 million, and the construction impacts
approximately 20% or more of the income producing property's gross
leasable area ("GLA") or the location and nature of the
construction significantly impacts or disrupts the daily operations
of the property. Redevelopment may also include a portion of
certain properties designated as same property for which we are
adding additional GLA or retenanting space.
Same Property NOI should not be considered an
alternative to net income in accordance with GAAP or as a measure
of liquidity. Our method of calculating Same Property NOI may
differ from methods used by other REITs and, accordingly, may not
be comparable to such other REITs.
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