OAK BROOK, Ill., May 5, 2020 /PRNewswire/ -- Retail
Properties of America, Inc. (NYSE: RPAI) (the
"Company") today reported financial and operating results
for the quarter ended March 31,
2020.
FINANCIAL RESULTS
For the quarter ended March 31, 2020, the Company reported:
- Net income attributable to common shareholders of $22.4 million, or $0.10 per diluted share, compared to $23.2 million, or $0.11 per diluted share, for the same period in
2019;
- Funds from operations (FFO) attributable to common shareholders
of $62.5 million, or $0.29 per diluted share, compared to $57.7 million, or $0.27 per diluted share, for the same period in
2019, growth of 7.4% per diluted share; and
- Operating funds from operations (Operating FFO) attributable to
common shareholders of $57.5 million,
or $0.27 per diluted share, compared
to $58.4 million, or $0.27 per diluted share, for the same period in
2019.
OPERATING RESULTS
For the quarter ended March 31, 2020, the Company's portfolio results
were as follows:
- 1.2% increase in same store net operating income (NOI) over the
comparable period in 2019;
- Total same store portfolio percent leased, including leases
signed but not commenced: 95.3% at March 31,
2020, down 90 basis points from 96.2% at December 31, 2019 and up 30 basis points from
95.0% at March 31, 2019;
- Retail portfolio occupancy: 94.1% at March 31, 2020, down 110 basis points from 95.2%
at December 31, 2019 and up 110 basis
points from 93.0% at March 31,
2019;
- Retail portfolio percent leased, including leases signed but
not commenced: 95.3% at March 31,
2020, down 90 basis points from 96.2% at December 31, 2019 and up 20 basis points from
95.1% at March 31, 2019;
- Retail anchor tenant occupancy: 96.8% at March 31, 2020, down 80 basis points from 97.6%
at December 31, 2019 and up 190 basis
points from 94.9% at March 31,
2019;
- Retail anchor tenant percent leased, including leases signed
but not commenced: 98.3% at March 31,
2020, down 50 basis points from 98.8% at December 31, 2019 and up 70 basis points from
97.6% at March 31, 2019;
- Total same store portfolio annualized base rent (ABR) per
occupied square foot of $19.58 at
March 31, 2020, up 0.4% from
$19.51 ABR per occupied square foot
at December 31, 2019 and up 1.9% from
$19.21 ABR per occupied square foot
at March 31, 2019;
- 285,000 square feet of retail leasing transactions comprised of
82 new and renewal leases; and
- Positive comparable cash leasing spreads of 4.8% on new leases
and 4.9% on renewal leases for a blended re-leasing spread of
4.9%.
"Our first quarter results illustrate the underlying strength of
our business heading into the COVID-19 pandemic," stated
Steve Grimes, chief executive
officer. "Our team now is focused on the joint goals of balancing
fiscal prudence with social awareness, responsibility and the
long-term viability of our tenants as we collectively navigate
through these uncertain times."
COVID-19 UPDATE
The Company did not incur significant
disruptions to its lease income and occupancy during the three
months ended March 31, 2020 from the
novel coronavirus (COVID-19) pandemic. However, since the start of
the second quarter, the pandemic has adversely impacted the
Company's business as many tenants, faced with reduced customer
traffic and revenue as a result of governmental and social mandates
related to the pandemic, have requested lease concessions from the
Company. Other tenants, which operate businesses considered to be
essential, remain open and continue to operate during this time.
The Company's portfolio ABR benefits from a composition of 37% from
essential uses and office, including 8% from grocery/warehouse
clubs and 6% from office tenants as detailed in the Company's
Quarterly Supplemental Information Package on page 16.
Regarding April rent charges, as of April
30, the Company has collected more than 52%. The rapid
development and fluidity of this situation precludes any prediction
as to the ultimate impact of COVID-19 on the Company's leasing
trends or financial or operating results. The Company is working to
preserve profitability and cash flow while also working with
tenants to address requests for lease concessions and
simultaneously preserving its contractual rights under its lease
agreements. While seeking to work toward a mutually agreeable
outcome with tenants directly impacted by COVID-19, the Company
believes that certain tenants, which remain open and hold an
ability to pay, have elected to withhold April rent unnecessarily.
Generally, the Company has not yet reached agreement with tenants
regarding concession requests, as discussions are ongoing.
COVID-19 RESPONSE
In response to the COVID-19
pandemic, the Company has already taken several significant steps
to further strengthen its financial position and balance sheet,
enhance its liquidity, provide maximum financial flexibility and
manage its financial leverage. These steps included:
- Drawing nearly all of the remaining balance under its
$850 million unsecured revolving line
of credit in March 2020;
- Depositing the proceeds from the revolver draw into accounts at
FDIC-insured institutions;
- Reducing expected 2020 development spend by approximately
$75 to $100
million primarily as a result of halting vertical
construction plans at its Carillon redevelopment;
- Implementing plans to reduce 2020 capital expenditures,
including tenant improvement outlays, and certain expenses,
including overhead, from its original budget; and
- Suspending the quarterly dividend as detailed later in this
release.
INVESTMENT ACTIVITY
Expansions and
Redevelopments
The Company continues to make progress on
the execution of its active expansion and redevelopment
projects.
Active Projects:
One Loudoun Downtown
During
the quarter, the Company and KETTLER, its joint venture partner,
advanced construction on the garages and foundation work for the
mixed-use expansion of Pads G & H at its One Loudoun Downtown
multi-tenant retail operating property located in the Washington, D.C. metropolitan statistical area
(MSA). Additionally, the Company and KETTLER completed utility work
for the new median and pocket park between Pads G & H, which
will enhance the community experience of the property and,
subsequent to quarter end, began frame construction work for the
multi-family component of the project. Also subsequent to quarter
end, the Company signed a construction contract with general
contractor L.F. Jennings for the office component of Pad G for
which construction is anticipated to begin during the second
quarter. This expansion project consists of up to 70,000 square
feet of commercial space and 378 one- and two-bedroom multi-family
rental units, which will become One
Loudoun's first apartment community, Vyne, and is
anticipated to open in late spring 2021. The expansion project
complements and enhances the Company's approximately 469,000 square
foot mixed-use community anchor asset, One Loudoun Downtown, which
boasted retail occupancy of 96.4% and office occupancy of 98.9% as
of March 31, 2020 and holds a
five-mile population of more than 190,000, average household
incomes of more than $175,000 and
sits in the county with the highest median income per capita in
the United States with a projected
five-year population growth rate of more than 7%.
Circle East
During the quarter, as previously
announced, the Company signed Ethan
Allen to a 6,000 square foot lease at a prominent corner
location at its Circle East mixed-use project located in
Towson, Maryland within the
Baltimore MSA. The Company also advanced lease negotiations for
space with several leading national personal service providers for
in-line space at the 80,000 square foot dual-sided street level
retail portion of the project. In addition, AvalonBay has commenced
tenant move-ins at the approximately 370 AvalonBay-owned
multi-family rental units that also form a portion of the
project.
The Shoppes at Quarterfield and Southlake Town Square
During the quarter, the Company initiated work at two recently
added projects, the site and building reconfiguration at The
Shoppes at Quarterfield and the single-tenant pad development at
Southlake Town Square. These two 100% pre-leased projects at
existing assets aggregate $11.0 to
$12.5 million in projected net
investment with projected returns of 11.5% to 15.5% and
stabilization targeted in the first half of 2021.
Carillon:
As previously announced, the Company has
halted plans for vertical construction at its Carillon
redevelopment project located in the Washington, D.C. MSA. The Company remains
aware of the significant demand for the medical office component of
the project, which benefits from the needs of the adjacent
University of Maryland Capital Region
Medical Center, a non-cyclical, shadow anchor of this project.
During the quarter, the Company terminated its agreement with Fore
Property Company related to the multi-family component of the
project. Subsequent to quarter end, the Company terminated its
agreement with Trammell Crow Company related to the medical office
building portion of the project. The Company will continue to
evaluate the potential resumption date for vertical construction
activities at Carillon and will maintain optionality for either the
monetization or build-out of the medical office and other
components of the project.
Dispositions
During the quarter, as previously
reported, the Company completed the sale of one non-target,
multi-tenant power center asset for $13.9
million.
Acquisitions
During the quarter, as previously
reported, the Company acquired the fee interest in an existing
multi-tenant, community center retail property for a gross purchase
price of $55.0 million. In connection
with this acquisition, the Company also assumed the lessor position
in a ground lease with a shadow anchor.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of
March 31, 2020, the Company had
$769.2 million in cash and cash
equivalents and no debt maturities in 2020. In addition, the
Company had $2.5 billion of gross
consolidated indebtedness with a weighted average contractual
interest rate of 3.25% and a weighted average maturity of 3.7
years. The Company's $1.7 billion in
net consolidated indebtedness resulted in a net debt to adjusted
EBITDAre ratio of 5.7x as of quarter end.
DIVIDEND
In order to preserve and enhance liquidity
and capital positioning, the Company's board of directors has
temporarily suspended future quarterly dividend payments on the
Company's outstanding Class A common stock. The Company's board of
directors will evaluate dividend declaration decisions quarterly
and consider REIT taxable income distribution requirements in these
deliberations. The timing and amount of dividend resumption depends
largely on the Company's operating cash flow performance as well as
other factors. Year to date, including dividends paid in
January 2020 and April 2020, the Company has paid $70.9 million in aggregate dividends.
WEBCAST AND CONFERENCE CALL INFORMATION
The Company's
management team will hold a webcast on Wednesday, May 6, 2020 at 11:00 AM (ET), to discuss its quarterly financial
results and operating performance, as well as business highlights
and outlook. In addition, the Company may discuss business and
financial developments and trends and other matters affecting the
Company, some of which may not have been previously disclosed.
A live webcast will be available online on the Company's website
at www.rpai.com in the INVEST section. A replay of the webcast will
be available. To listen to the replay, please go to www.rpai.com in
the INVEST section of the website and follow the instructions.
The conference call can be accessed by dialing (877) 705-6003 or
(201) 493-6725 for international participants. Please dial in at
least ten minutes prior to the start of the call to register. A
replay of the call will be available from 2:00 PM (ET) on May 6,
2020 until midnight (ET) on May 20,
2020. The replay can be accessed by dialing (844) 512-2921
or (412) 317-6671 for international callers and entering pin number
13699877.
SUPPLEMENTAL INFORMATION
The Company has posted
supplemental financial and operating information and other data in
the INVEST section of its website.
ABOUT RPAI
Retail Properties of America, Inc. is a
REIT that owns and operates high quality, strategically located
open-air shopping centers, including properties with a mixed-use
component. As of March 31, 2020, the
Company owned 102 retail operating properties in the United States representing 20.0 million
square feet. The Company is publicly traded on the New York Stock
Exchange under the ticker symbol RPAI. Additional information about
the Company is available at www.rpai.com.
SAFE HARBOR LANGUAGE
The statements and certain other
information contained in this press release, which can be
identified by the use of forward-looking terminology such as
"believes," "expects," "may," "should," "intends," "plans,"
"estimates" or "anticipates" and variations of such words or
similar expressions or the negative of such words, constitute
"forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, and are subject to
the safe harbors created thereby. These forward-looking
statements reflect the Company's current views about its plans,
intentions, expectations, strategies and prospects, which are based
on the information currently available to the Company and on
assumptions it has made. Although the Company believes that its
plans, intentions, expectations, strategies and prospects as
reflected in or suggested by those forward-looking statements are
reasonable, the Company can give no assurance that such plans,
intentions, expectations or strategies will be attained or
achieved. Furthermore, these forward-looking statements should be
considered as subject to the many risks and uncertainties that
exist in the Company's operations and business
environment. Such risks and uncertainties could cause actual
results to differ materially from those projected. These
uncertainties include, but are not limited to, economic, business
and financial conditions, and changes in the Company's industry and
changes in the real estate markets in particular, economic and
other developments in markets where the Company has a high
concentration of properties, the Company's business strategy, the
Company's projected operating results, rental rates and/or vacancy
rates, frequency and magnitude of defaults on, early terminations
of or non-renewal of leases by tenants, bankruptcy, insolvency or
general downturn in the business of a major tenant or a significant
number of smaller tenants, adverse impact of e-commerce
developments and shifting consumer retail behavior on tenants,
interest rates or operating costs, the discontinuation of London
Interbank Offered Rate (LIBOR), real estate and zoning laws and
changes in real property tax rates, real estate valuations, the
Company's leverage, the Company's ability to generate sufficient
cash flows to service outstanding indebtedness and make
distributions to shareholders, changes in the dividend policy for
the Company's Class A common stock and its ability to pay dividends
at current levels, the Company's ability to obtain necessary
outside financing, the availability, terms and deployment of
capital, general volatility of the capital and credit markets and
the market price of the Company's Class A common stock, risks
generally associated with real estate acquisitions and
dispositions, including the Company's ability to identify and
pursue acquisition and disposition opportunities, risks generally
associated with redevelopment, including the impact of construction
delays and cost overruns and the Company's ability to lease
redeveloped space and identify and pursue redevelopment
opportunities, the Company's ability to enter into new leases or
renew leases on favorable terms, pandemics or other public health
crises, such as the COVID-19 outbreak, and the related impact on
(i) the Company's ability to manage its properties, finance its
operations and perform necessary administrative and reporting
functions and (ii) the ability of the Company's tenants to operate
their businesses, generate sales and meet their financial
obligations, including the obligation to pay rent and other charges
as specified in their leases, the Company's ability to create
long-term shareholder value, regulatory changes and other risk
factors, including those detailed in the sections of the Company's
most recent Forms 10-K and 10-Q filed with the SEC titled "Risk
Factors," which you should interpret as heightened as a result of
the numerous and ongoing adverse impacts of COVID-19. The extent to
which COVID-19 impacts the Company and its tenants will depend on
future developments, which are highly uncertain and cannot be
predicted with confidence, including the scope, severity and
duration of the pandemic, the actions taken to contain the pandemic
or mitigate its impact, and the direct and indirect economic
effects of the pandemic and containment measures, among others. The
Company assumes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
NON-GAAP FINANCIAL MEASURES
As defined by the National
Association of Real Estate Investment Trusts (NAREIT), an industry
trade group, Funds From Operations (FFO) means net income computed
in accordance with generally accepted accounting principles (GAAP),
excluding (i) depreciation and amortization related to real estate,
(ii) gains from sales of real estate assets, (iii) gains and losses
from change in control and (iv) impairment write-downs of real
estate assets and investments in entities directly attributable to
decreases in the value of real estate held by the entity. The
Company has adopted the NAREIT definition in its computation of FFO
attributable to common shareholders. The Company believes that,
subject to the following limitations, FFO attributable to common
shareholders provides a basis for comparing its performance and
operations to those of other real estate investment trusts (REITs).
The Company believes that FFO attributable to common shareholders,
which is a supplemental non-GAAP financial measure, provides an
additional and useful means to assess the operating performance of
REITs. FFO attributable to common shareholders does not represent
an alternative to (i) "Net income" or "Net income attributable to
common shareholders" as an indicator of the Company's financial
performance, or (ii) "Cash flows from operating activities" in
accordance with GAAP as a measure of the Company's capacity to fund
cash needs, including the payment of dividends.
The Company also reports Operating FFO attributable to common
shareholders, which is defined as FFO attributable to common
shareholders excluding the impact of discrete non-operating
transactions and other events which the Company does not consider
representative of the comparable operating results of its real
estate operating portfolio, which is its core business platform.
Specific examples of discrete non-operating transactions and other
events include, but are not limited to, the impact on earnings from
gains or losses associated with the early extinguishment of debt or
other liabilities, litigation involving the Company, including
gains recognized as a result of settlement and costs to engage
outside counsel related to litigation with former tenants, the
impact on earnings from executive separation and the excess of
redemption value over carrying value of preferred stock redemption,
which are not otherwise adjusted in the Company's calculation of
FFO attributable to common shareholders. The Company believes that
Operating FFO attributable to common shareholders, which is a
supplemental non-GAAP financial measure, provides an additional and
useful means to assess the operating performance of REITs.
Operating FFO attributable to common shareholders does not
represent an alternative to (i) "Net income" or "Net income
attributable to common shareholders" as an indicator of the
Company's financial performance, or (ii) "Cash flows from operating
activities" in accordance with GAAP as a measure of the Company's
capacity to fund cash needs, including the payment of dividends.
Comparison of the Company's presentation of Operating FFO
attributable to common shareholders to similarly titled measures
for other REITs may not necessarily be meaningful due to possible
differences in definition and application by such REITs.
The Company also reports Net Operating Income (NOI), which it
defines as all revenues other than (i) straight-line rental income
(non-cash), (ii) amortization of lease inducements, (iii)
amortization of acquired above and below market lease intangibles
and (iv) lease termination fee income, less real estate taxes and
all operating expenses other than lease termination fee expense and
non-cash ground rent expense, which is comprised of amortization of
right-of-use lease assets and amortization of lease liabilities.
NOI consists of Same Store NOI and NOI from Other Investment
Properties. Same Store NOI represents NOI from the Company's same
store portfolio consisting of 101 retail operating properties
acquired or placed in service and stabilized prior to
January 1, 2019. NOI from Other Investment Properties
represents NOI primarily from (i) properties acquired or placed in
service during 2019 and 2020, (ii) the multi-family rental units at
Plaza del Lago, a redevelopment project that was placed in service
during 2019, (iii) Circle East, which is in active redevelopment,
(iv) One Loudoun Downtown – Pads G & H, which are in active
development, (v) Carillon, a redevelopment project where the
Company halted plans for vertical construction during the three
months ended March 31, 2020 in
response to current macroeconomic conditions due to the impact of
the COVID-19 pandemic; however, the Company is actively completing
site work preparation at the property in anticipation of potential
future development at the site, (vi) properties that were sold or
held for sale during 2019 and 2020, and (vii) the net income from
the Company's wholly-owned captive insurance company. The Company
believes that NOI, Same Store NOI and NOI from Other Investment
Properties, which are supplemental non-GAAP financial measures,
provide an additional and useful operating perspective not
immediately apparent from "Net income" or "Net income attributable
to common shareholders" in accordance with GAAP. The Company uses
these measures to evaluate its performance on a
property-by-property basis because they allow management to
evaluate the impact that factors such as lease structure, lease
rates and tenant base have on the Company's operating results. NOI,
Same Store NOI and NOI from Other Investment Properties do not
represent alternatives to "Net income" or "Net income attributable
to common shareholders" in accordance with GAAP as indicators of
the Company's financial performance. Comparison of the Company's
presentation of NOI, Same Store NOI and NOI from Other Investment
Properties to similarly titled measures for other REITs may not
necessarily be meaningful due to possible differences in definition
and application by such REITs.
As defined by NAREIT, EBITDA for real estate (EBITDAre)
means net income (loss) computed in accordance with GAAP, plus (i)
interest expense, (ii) income tax expense, (iii) depreciation and
amortization, (iv) impairment charges on investment property and
(v) impairment charges on investments in unconsolidated affiliates
if caused by a decrease in the value of depreciable property in the
affiliate, plus or minus (i) gains from sales of investment
property, including gains (or losses) on change in control, and
(ii) adjustments to reflect the entity's share of EBITDAre
of unconsolidated affiliates. The Company reports Adjusted
EBITDAre, which excludes the impact of certain discrete
non-operating transactions and other events such as the gain on
litigation settlement. The Company believes that Adjusted
EBITDAre is useful because it allows investors and
management to evaluate and compare the Company's performance from
period to period in a meaningful and consistent manner in addition
to standard financial measurements under GAAP. EBITDAre and
Adjusted EBITDAre are supplemental non-GAAP financial
measures and should not be considered alternatives to "Net income"
or "Net income attributable to common shareholders" as indicators
of the Company's financial performance. Comparison of the Company's
presentation of EBITDAre and Adjusted EBITDAre to
similarly titled measures for other REITs may not necessarily be
meaningful due to possible differences in definition and
application by such REITs.
Net Debt to Adjusted EBITDAre is a supplemental non-GAAP
financial measure and represents (i) the Company's total debt
principal, which excludes unamortized discount and capitalized loan
fees, less (ii) cash and cash equivalents divided by
(iii) Adjusted EBITDAre for the prior three months,
annualized (Annualized Adjusted EBITDAre). The Company
believes that this ratio is useful because it provides investors
with information regarding its total debt principal net of cash and
cash equivalents, which could be used to repay debt, compared to
its performance as measured using Annualized Adjusted
EBITDAre. Comparison of the Company's presentation of Net
Debt to Adjusted EBITDAre to similarly titled measures for
other REITs may not necessarily be meaningful due to possible
differences in definition and application by such REITs.
CONTACT INFORMATION
Michael
Gaiden
Vice President – Capital Markets and Investor Relations
Retail Properties of America, Inc.
(630) 634-4233
Retail Properties
of America, Inc.
|
Condensed
Consolidated Balance Sheets
|
(amounts in
thousands, except par value amounts)
|
(unaudited)
|
|
|
March 31,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
Investment
properties:
|
|
|
|
Land
|
$
|
1,075,577
|
|
|
$
|
1,021,829
|
|
Building and other
improvements
|
3,548,769
|
|
|
3,544,582
|
|
Developments in
progress
|
126,761
|
|
|
113,353
|
|
|
4,751,107
|
|
|
4,679,764
|
|
Less: accumulated
depreciation
|
(1,416,981)
|
|
|
(1,383,274)
|
|
Net investment
properties (includes $30,600 and $12,445 from consolidated
variable interest entities,
respectively)
|
3,334,126
|
|
|
3,296,490
|
|
|
|
|
|
Cash and cash
equivalents
|
769,241
|
|
|
9,989
|
|
Accounts and notes
receivable, net
|
72,003
|
|
|
73,832
|
|
Acquired lease
intangible assets, net
|
78,439
|
|
|
79,832
|
|
Right-of-use lease
assets
|
44,157
|
|
|
50,241
|
|
Other assets, net
(includes $344 and $164 from consolidated variable interest entities, respectively)
|
71,627
|
|
|
75,978
|
|
Total
assets
|
$
|
4,369,593
|
|
|
$
|
3,586,362
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Liabilities:
|
|
|
|
Mortgages payable,
net (includes unamortized discount of $(483) and $(493),
respectively, and unamortized capitalized
loan fees of $(240) and $(256), respectively)
|
$
|
93,562
|
|
|
$
|
94,155
|
|
Unsecured notes
payable, net (includes unamortized discount of $(586) and
$(616), respectively, and
unamortized capitalized loan fees of $(2,994) and $(3,137),
respectively)
|
796,420
|
|
|
796,247
|
|
Unsecured term loans,
net (includes unamortized capitalized loan fees of $(3,208)
and $(3,477), respectively)
|
716,792
|
|
|
716,523
|
|
Unsecured revolving
line of credit
|
849,704
|
|
|
18,000
|
|
Accounts payable and
accrued expenses
|
50,622
|
|
|
78,902
|
|
Distributions
payable
|
35,464
|
|
|
35,387
|
|
Acquired lease
intangible liabilities, net
|
67,573
|
|
|
63,578
|
|
Lease
liabilities
|
85,340
|
|
|
91,129
|
|
Other liabilities
(includes $3,233 and $1,707 from consolidated variable interest entities, respectively)
|
76,815
|
|
|
56,368
|
|
Total
liabilities
|
2,772,292
|
|
|
1,950,289
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
Preferred stock,
$0.001 par value, 10,000 shares authorized, none issued or
outstanding
|
—
|
|
|
—
|
|
Class A common
stock, $0.001 par value, 475,000 shares authorized,
214,122 and 213,600 shares issued and
outstanding as of March 31, 2020 and December 31, 2019, respectively
|
214
|
|
|
214
|
|
Additional paid-in
capital
|
4,512,939
|
|
|
4,510,484
|
|
Accumulated
distributions in excess of earnings
|
(2,879,040)
|
|
|
(2,865,933)
|
|
Accumulated other
comprehensive loss
|
(39,870)
|
|
|
(12,288)
|
|
Total shareholders'
equity
|
1,594,243
|
|
|
1,632,477
|
|
Noncontrolling
interests
|
3,058
|
|
|
3,596
|
|
Total
equity
|
1,597,301
|
|
|
1,636,073
|
|
Total liabilities
and equity
|
$
|
4,369,593
|
|
|
$
|
3,586,362
|
|
Retail Properties
of America, Inc.
|
Condensed
Consolidated Statements of Operations
|
(amounts in
thousands, except per share amounts)
|
(unaudited)
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
Lease
income
|
$
|
118,695
|
|
|
$
|
122,703
|
|
|
|
|
|
Expenses:
|
|
|
|
Operating
expenses
|
16,414
|
|
|
17,686
|
|
Real estate
taxes
|
18,533
|
|
|
18,403
|
|
Depreciation and
amortization
|
40,173
|
|
|
43,267
|
|
Provision for
impairment of investment properties
|
346
|
|
|
—
|
|
General and
administrative expenses
|
9,165
|
|
|
10,499
|
|
Total
expenses
|
84,631
|
|
|
89,855
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
Interest
expense
|
(17,046)
|
|
|
(17,430)
|
|
Gain on sales of
investment properties
|
—
|
|
|
8,449
|
|
Gain on litigation
settlement
|
6,100
|
|
|
—
|
|
Other expense,
net
|
(761)
|
|
|
(659)
|
|
Net income
|
22,357
|
|
|
23,208
|
|
Net income
attributable to noncontrolling interests
|
—
|
|
|
—
|
|
Net income
attributable to common shareholders
|
$
|
22,357
|
|
|
$
|
23,208
|
|
|
|
|
|
Earnings per
common share – basic and diluted:
|
|
|
|
Net income per common
share attributable to common shareholders
|
$
|
0.10
|
|
|
$
|
0.11
|
|
|
|
|
|
Weighted average
number of common shares outstanding – basic
|
213,215
|
|
|
212,850
|
|
|
|
|
|
Weighted average
number of common shares outstanding – diluted
|
213,215
|
|
|
213,223
|
|
Retail Properties
of America, Inc.
|
Reconciliation of
Non-GAAP Financial Measures
|
(amounts in
thousands, except per share amounts)
|
(unaudited)
|
|
Funds From
Operations (FFO) Attributable to Common Shareholders
and
|
Operating FFO
Attributable to Common Shareholders
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
Net income
attributable to common shareholders
|
$
|
22,357
|
|
|
$
|
23,208
|
|
Depreciation and
amortization of real estate
|
39,838
|
|
|
42,913
|
|
Provision for
impairment of investment properties
|
346
|
|
|
—
|
|
Gain on sales of
investment properties
|
—
|
|
|
(8,449)
|
|
FFO attributable
to common shareholders
|
$
|
62,541
|
|
|
$
|
57,672
|
|
|
|
|
|
FFO attributable to
common shareholders per common share outstanding –
diluted
|
$
|
0.29
|
|
|
$
|
0.27
|
|
|
|
|
|
FFO attributable to
common shareholders
|
$
|
62,541
|
|
|
$
|
57,672
|
|
Gain on litigation
settlement
|
(6,100)
|
|
|
—
|
|
Other (a)
|
1,011
|
|
|
711
|
|
Operating FFO
attributable to common shareholders
|
$
|
57,452
|
|
|
$
|
58,383
|
|
|
|
|
|
Operating FFO
attributable to common shareholders per common share outstanding –
diluted
|
$
|
0.27
|
|
|
$
|
0.27
|
|
|
|
|
|
Weighted average
number of common shares outstanding – diluted
|
213,215
|
|
|
213,223
|
|
|
|
(a)
|
Primarily consists of
the impact on earnings from litigation involving the Company,
including costs to engage outside counsel related to litigation
with former tenants, which is included within "Other expense, net"
in the condensed consolidated statements of operations.
|
Retail Properties
of America, Inc.
|
Reconciliation of
Non-GAAP Financial Measures (continued)
|
(amounts in
thousands)
|
(unaudited)
|
|
Reconciliation of
Net Income Attributable to Common Shareholders to Same Store
NOI
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
Net income
attributable to common shareholders
|
$
|
22,357
|
|
|
$
|
23,208
|
|
Adjustments to
reconcile to Same Store NOI:
|
|
|
|
Gain on sales of
investment properties
|
—
|
|
|
(8,449)
|
|
Gain on litigation
settlement
|
(6,100)
|
|
|
—
|
|
Depreciation and
amortization
|
40,173
|
|
|
43,267
|
|
Provision for
impairment of investment properties
|
346
|
|
|
—
|
|
General and
administrative expenses
|
9,165
|
|
|
10,499
|
|
Interest
expense
|
17,046
|
|
|
17,430
|
|
Straight-line rental
income, net
|
(341)
|
|
|
(1,500)
|
|
Amortization of
acquired above and below market lease intangibles, net
|
(976)
|
|
|
(2,334)
|
|
Amortization of lease
inducements
|
419
|
|
|
296
|
|
Lease termination
fees, net
|
(124)
|
|
|
(1,188)
|
|
Non-cash ground rent
expense, net
|
333
|
|
|
358
|
|
Other expense,
net
|
761
|
|
|
659
|
|
NOI
|
83,059
|
|
|
82,246
|
|
NOI from Other
Investment Properties
|
(1,318)
|
|
|
(1,484)
|
|
Same Store
NOI
|
$
|
81,741
|
|
|
$
|
80,762
|
|
Retail Properties
of America, Inc.
|
Reconciliation of
Non-GAAP Financial Measures (continued)
|
(amounts in
thousands, except ratio)
|
(unaudited)
|
|
Reconciliation of
Mortgages Payable, Net, Unsecured Notes Payable,
Net,
|
Unsecured Term
Loans, Net and Unsecured Revolving Line of Credit to Total Net
Debt
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
|
|
|
|
|
Mortgages payable,
net
|
|
$
|
93,562
|
|
|
$
|
94,155
|
|
Unsecured notes
payable, net
|
|
796,420
|
|
|
796,247
|
|
Unsecured term loans,
net
|
|
716,792
|
|
|
716,523
|
|
Unsecured revolving
line of credit
|
|
849,704
|
|
|
18,000
|
|
Total
|
|
2,456,478
|
|
|
1,624,925
|
|
Mortgage discount,
net of accumulated amortization
|
|
483
|
|
|
493
|
|
Unsecured notes
payable discount, net of accumulated amortization
|
|
586
|
|
|
616
|
|
Capitalized loan
fees, net of accumulated amortization
|
|
6,442
|
|
|
6,870
|
|
Total debt
principal
|
|
2,463,989
|
|
|
1,632,904
|
|
Less: consolidated
cash and cash equivalents
|
|
(769,241)
|
|
|
(9,989)
|
|
Total net
debt
|
|
$
|
1,694,748
|
|
|
$
|
1,622,915
|
|
Net Debt to
Adjusted EBITDAre (a)
|
|
5.7x
|
|
|
5.4x
|
|
|
Reconciliation of
Net Income to Adjusted EBITDAre
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2020
|
|
December 31,
2019
|
|
|
|
|
|
Net income
|
|
$
|
22,357
|
|
|
$
|
16,172
|
|
Interest
expense
|
|
17,046
|
|
|
16,694
|
|
Depreciation and
amortization
|
|
40,173
|
|
|
40,964
|
|
Provision for
impairment of investment properties
|
|
346
|
|
|
1,121
|
|
EBITDAre
|
|
$
|
79,922
|
|
|
$
|
74,951
|
|
Gain on litigation
settlement
|
|
(6,100)
|
|
|
—
|
|
Adjusted
EBITDAre
|
|
$
|
73,822
|
|
|
$
|
74,951
|
|
Annualized
Adjusted EBITDAre
|
|
$
|
295,288
|
|
|
$
|
299,804
|
|
|
|
(a)
|
For purposes of this
ratio calculation, annualized three months ended figures were
used.
|
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SOURCE Retail Properties of America, Inc.