UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
November 2, 2015
Date of Report (Date of earliest event reported)
Rouse Properties, Inc.
(Exact name of registrant as specified in its charter)
|
| | | | |
Delaware | | 1-35278 | | 90-0750824 |
(State or other jurisdiction | | (Commission | | (IRS Employer |
of incorporation) | | File Number) | | Identification No.) |
|
| | |
1114 Avenue of the Americas, Suite 2800, New York, New York | | 10036 |
(Address of principal executive offices) | | (Zip Code) |
(212) 608-5108
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On November 2, 2015, Rouse Properties, Inc. (the “Company”) issued a press release announcing the financial results of the Company for the quarter ended September 30, 2015. A copy of the press release is being furnished as Exhibit 99.1 to this report. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure.
On November 2, 2015, the Company made available on its website the press release described in Item 2.02 above as well as certain supplemental financial information regarding its operations for the three months ended September 30, 2015. A copy of such supplemental financial information is being furnished as Exhibit 99.2 to this report. This information shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
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| | | |
Exhibit No. | | Description |
99.1 |
| | Press Release titled “Rouse Properties Reports Third Quarter 2015 Results,” dated November 2, 2015 (furnished herewith). |
99.2 |
| | Certain Supplemental Information for the Quarter Ended September 30, 2015 (furnished herewith). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | |
| | ROUSE PROPERTIES, INC. |
| | |
| | |
| By: | /s/ John Wain |
| | John Wain |
| | Chief Financial Officer |
| |
Date: November 2, 2015 | |
EXHIBIT INDEX
|
| | | |
Exhibit No. | | Description |
99.1 |
| | Press Release titled “Rouse Properties Reports Third Quarter 2015 Results,” dated November 2, 2015 (furnished herewith). |
99.2 |
| | Certain Supplemental Information for the Quarter Ended September 30, 2015 (furnished herewith). |
Rouse Properties Reports Third Quarter 2015 Results
- Operating Portfolio Leased Percentage Increased 60 bps YoY to 92.3% -
- Initial Lease Spreads Increased by 13.2% in Q3 and 11.4% Year-to-Date -
- Sales for Operating Portfolio Grows to $345, up 7.1% on Comparable TTM Basis-
- Completed $300 Million of Refinancings, Addressed All Remaining 2015 Loan Maturities -
- Increasing Low End of Core FFO Guidance Range by $0.01 Per Share -
- Increasing Low End Same Property Core NOI Guidance Range by 50 bps -
New York, NY, November 2, 2015 - Rouse Properties, Inc. (the "Company" or "Rouse") (NYSE: RSE) today announced consolidated results for the three months ended September 30, 2015.
"Our third quarter results highlight the progress we are making in transforming our portfolio. Our strong leasing activity produced solid increases of initial leasing spreads, average rents and leased percentage,” stated Andrew Silberfein, Rouse Properties’ President and Chief Executive Officer. “Our current sales of $345 psf have increased by $23 psf since the start of the year, and are being driven by 7.1% growth on a Comparable TTM basis. We continue to accelerate the changes we are making across our entire platform. These changes include 14 capital projects either underway or starting shortly, the addition of nine H&M's of approximately 200,000 square feet and the proactive re-tenanting of two Sears anchors. As we execute on these initiatives, we will create significant value for our shareholders and continue to drive strong growth in cash flow. This can clearly be seen at our grand opening at The Shoppes at Gateway, with tenant sales far exceeding our expectations and the community embracing the high quality offering we have now delivered. Within the past few weeks we have recently opened nearly 120,000 square feet of leading national tenants such as Ulta Beauty, Panera Bread, Petco, Ross, and Hobby Lobby."
Operational and Financial Highlights Third Quarter 2015(1)
| |
• | Initial rental rates for new and renewal leases on a same suite basis rose 13.2%, and average rental rates increased by 19.4%, for leases executed during the quarter. |
| |
• | Leased approximately 530,000 square feet of inline space, with signed not yet open leases growing to 1.3 million square feet representing $17.7 million of incremental annual revenue. |
| |
• | For the Operating Portfolio, leased percentage increased 60 basis points YoY to 92.3%. Including anchors, leased percentage was 96.3%. |
| |
• | For the Operating Portfolio, tenant sales were $345 per square foot on a trailing twelve month basis. On a comparable basis, trailing twelve month tenant sales increased 7.1%. |
| |
• | Same Property average total rent for tenants less than 10,000 square feet increased 4.2%, YoY, to $41.39 from $39.71 per square foot. |
(1) Operating Portfolio excludes properties undergoing substantial redevelopment and special consideration assets.
Financial Results for the Three Months Ended September 30, 2015
Core FFO was $24.8 million, or $0.43 per diluted share, as compared to $23.7 million, or $0.41 per diluted share in the prior year period. The year over year increase was primarily due to the impact of properties acquired in 2014 and 2015. This was partially offset by reduced FFO from the dispositions of Collin Creek Mall and Steeplegate Mall as well as the sale of The Shoppes at Knollwood Mall.
Core NOI was $47.4 million, a decrease of 1.0% from $47.6 million in the prior year period. Excluding the contribution from non same property assets and lease termination income of approximately $0.2 million in the third quarter of 2015 and $0.9 million in the third quarter of 2014, Same Property Core NOI increased by 1.0% to $36.7 million from $36.3 million in the prior year. Same Property Core NOI was impacted by several factors, including: i) the termination or relocation of 49 stores to make contiguous space available for H&M; ii) an increase in bad debt and associated litigation expenses, and; iii) the increase in properties undergoing redevelopment.
Net loss attributable to Rouse Properties was $(1.3) million or $(0.02) per diluted share, as compared to a net loss of $(26.6) million or $(0.46) per diluted share in the prior year period. Net loss for the three months ended September 30, 2014, included a provision for impairment of $10.7 million, related to reductions in the estimated values of Steeplegate Mall and Collin Creek, two properties that have been conveyed to the lender during 2015. In addition, a reduction in depreciation and amortization and interest expense during the three months ended September 30, 2015 have also contributed to the change in net loss.
Financial Activities
On July 1, 2015, the Company repaid the $59.0 million mortgage debt balance on Grand Traverse Mall which had a fixed interest rate of 5.02%. On July 29, 2015, Grand Traverse Mall was added to the 2013 Corporate Facility collateral pool.
On September 11, 2015, the loan associated with NewPark Mall was refinanced for $135.0 million, with an initial funding of $114.3 million. The loan provides for a subsequent funding of up to $20.8 million upon achieving certain conditions. The loan has a term of three years with a one-year extension option subject to the fulfillment of certain conditions. The borrower entered into an interest swap commencing January 2016, which fixes the interest rate at 3.26%, through September 2018.
Subsequent Events
On October 8, 2015, the loan associated with Greenville Mall, located in Greenville, North Carolina was refinanced with a new, non-recourse mortgage loan for $45.5 million. The loan bears interest at a fixed rate of of 4.46%, matures in November 2025, and amortizes over 30 years. This loan replaced a $40.2 million non-recourse mortgage loan which had a fixed interest rate of 5.29%.
On October 8, 2015, the loan associated with The Shoppes at Bel Air located in Mobile, Alabama was refinanced with a new, non-recourse mortgage loan for $120.0 million. The initial funding of $110.5 million was used to retire the outstanding mortgage loan of $109.5 million which had a fixed interest rate of 5.30%. The loan provides for a subsequent funding of $9.5 million upon achieving certain conditions. The loan bears interest at a floating rate of LIBOR (30 day) plus 235 basis points, is interest only for the first two years, with a fixed amortization thereafter. The loan has a term of three years, with two one-year extension options subject to achieving certain conditions. The borrower entered into an interest swap commencing January 2016 which fixes the interest rate at 3.34%, through September 2018.
On October 29, 2015, the Board of Directors authorized management to implement a Stock Repurchase Program in the maximum amount of $50.0 million over a period of up to two years. Purchases made pursuant to the Stock Repurchase Program will be made in the open market from time to time as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The Stock Repurchase Program may be suspended or discontinued at any time.
Common Stock Dividend
On October 29, 2015, the Company's Board of Directors declared a fourth quarter common stock dividend of $0.18 per share, which will be paid on January 29, 2016 to stockholders of record on January 15, 2016.
2015 Guidance
The Company is increasing the low end of Core FFO Guidance Range by $0.01 to $1.75 to $1.78 per diluted share, based on management's expectations as of the date of this release. Full year guidance assumes the following: Same Property Core NOI growth of 3.0% to 3.75%, general and administrative expense of $25.9 million to $26.3 million, and interest expense of $67.0 million to $67.3 million. The guidance presented does not include the effects of property acquisitions, dispositions, or capital transaction activity completed subsequent to September 30, 2015, except for the mortgage refinancings mentioned in Subsequent Events above.
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| | | | | | | | |
| | For the year ending |
| | December 31, 2015 |
| | Low | High |
GAAP expected net income per share | | $ | 0.78 |
| | $ | 0.80 |
|
Add: Depreciation and amortization | | 1.64 | | 1.67 |
Add: Provision for impairment | | 0.05 | | 0.05 |
Less: Gain on sale of real estate assets | | (0.56) | | (0.56) |
Less: Gain on extinguishment of debt | | (0.46) | | (0.46) |
Expected Funds From Operations per share | | 1.45 | | 1.50 |
Other Core Funds From Operations adjustments (1) | | 0.30 | | 0.28 |
Core Funds From Operations (2) | | $1.75 | | $1.78 |
(1) Refer to the Supplemental Information package for additional details on the nature of the adjustments to reconcile to FFO and Core FFO. 2015 Guidance includes:
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| | | | | | | | |
| | Low | | High |
Straight-line rent and above / below market lease amortization | | $ | 6,850 |
| | $ | 6,500 |
|
Other expense | | 6,000 |
| | 5,500 |
|
Amortization and write off of market rate adjustments | | (900 | ) | | (800 | ) |
Amortization and write off of deferred financing costs | | 4,500 |
| | 4,250 |
|
Income taxes | | 725 |
| | 625 |
|
(2) Assumes 2015 annualized weighted average common shares outstanding - diluted of 58,200,000.
Supplemental Information
The Company released an informational supplemental packet, available at www.rouseproperties.com under the Investors section, with additional detail, including a description of non-GAAP financial measures and reconciliation to GAAP measures.
Investor Conference Webcast and Conference Call
The Company will host a webcast and conference call at 8:00 a.m. eastern standard time on November 3, 2015, to discuss third quarter 2015 results. The number to call is 877-705-6003 (domestic) and 1-201-493-6725 (international). The live webcast will be available at www.rouseproperties.com under the Investors section. A replay of the conference call will be available through November 17, 2015, by dialing 877-870-5176 (domestic) and 1-858-384-5517 (international) and entering the passcode 13621908.
Forward-Looking Statements
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statements. These forward-looking statements may include statements related to the Company's ability to outperform the ongoing recovery of the retail and REIT industry and the markets in which the Company's mall properties are located, the Company's ability to generate internal and external growth, the Company's ability to identify and complete the acquisition of properties in new markets, the Company's ability to complete redevelopment projects, and the Company's ability to increase margins, including net operating income. For a description of factors that may cause the Company's actual results or performance to differ from its forward-looking statements, please review the information under the
heading “Risk Factors” included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 and other documents filed by the Company with the Securities and Exchange Commission.
Non-GAAP Financial Measures
The Company makes reference to net operating income (“NOI”) and funds from operations (“FFO”). NOI is defined as operating revenues (minimum rents, including lease termination fees, tenant recoveries, overage rents, and other income) less property and related expenses (property operating expenses, real estate taxes, repairs and maintenance, marketing, and provision for doubtful accounts). We use FFO, as defined by the National Association of Real Estate Investment Trusts, as a supplemental measure of our operating performance. FFO is defined as net income (loss) attributable to common stockholders in accordance with GAAP, excluding impairment write-downs on depreciable real estate, gains (or losses) from cumulative effects of accounting changes, extraordinary items and sales of properties, and real estate related depreciation and amortization.
In order to present operations in a manner most relevant to its future operations, Core FFO and Core NOI have been presented to exclude certain non-cash and non-recurring revenue and expenses. A reconciliation of NOI to Core NOI and FFO to Core FFO has been included in the "Reconciliation of Core NOI and Core FFO" schedule attached to this release.
NOI, FFO and derivations thereof are not alternatives to GAAP operating income (loss) or net income (loss) available to common stockholders. For reference, as an aid in understanding management's computation of NOI and FFO, a reconciliation of NOI to operating income and FFO to net income (loss) available to common stockholders in accordance with GAAP has been included in the "Reconciliation of Non-GAAP to GAAP Financial Measures" schedule attached to this release.
About Rouse
Rouse Properties, Inc. (NYSE:RSE) is a publicly traded real estate investment trust headquartered in New York City and was founded on a legacy of innovation and creativity. Among the country's largest publicly traded regional mall owners, the Company's geographically diverse portfolio spans the United States from coast to coast, and includes 35 malls and retail centers in 21 states encompassing approximately 24.1 million square feet. For more information please visit: www.rouseproperties.com.
Consolidated Statements of Operations and Comprehensive Income (Loss)
|
| | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
(In thousands, except per share amounts) | September 30, 2015 (Unaudited) | | September 30, 2014 (Unaudited) | | September 30, 2015 (Unaudited) | | September 30, 2014 (Unaudited) |
Revenues: | |
| | |
| | | | |
Minimum rents | $ | 52,035 |
| | $ | 51,817 |
| | $ | 154,339 |
| | $ | 144,608 |
|
Tenant recoveries | 19,069 |
| | 20,518 |
| | 57,910 |
| | 58,430 |
|
Overage rents | 881 |
| | 726 |
| | 3,204 |
| | 2,664 |
|
Other | 1,568 |
| | 1,722 |
| | 5,070 |
| | 4,711 |
|
Total revenues | 73,553 |
| | 74,783 |
| | 220,523 |
| | 210,413 |
|
Expenses: | |
| | |
| | | | |
Property operating costs | 17,537 |
| | 18,639 |
| | 51,502 |
| | 52,535 |
|
Real estate taxes | 5,694 |
| | 7,287 |
| | 20,049 |
| | 19,553 |
|
Property maintenance costs | 1,864 |
| | 2,394 |
| | 7,558 |
| | 8,170 |
|
Marketing | 419 |
| | 572 |
| | 1,357 |
| | 1,653 |
|
Provision for doubtful accounts | 759 |
| | 271 |
| | 1,317 |
| | 659 |
|
General and administrative | 6,327 |
| | 6,132 |
| | 19,685 |
| | 18,613 |
|
Provision for impairment | — |
| | 10,665 |
| | 2,900 |
| | 10,665 |
|
Depreciation and amortization | 22,856 |
| | 27,130 |
| | 72,719 |
| | 71,593 |
|
Other | 1,254 |
| | 1,371 |
| | 5,205 |
| | 2,631 |
|
Total operating expenses | 56,710 |
| | 74,461 |
| | 182,292 |
| | 186,072 |
|
Operating income | 16,843 |
| | 322 |
| | 38,231 |
| | 24,341 |
|
| | | | | | | |
Interest income | 4 |
| | 34 |
| | 18 |
| | 310 |
|
Interest expense | (18,110 | ) | | (26,592 | ) | | (54,745 | ) | | (63,239 | ) |
Gain (loss) on extinguishment of debt | (67 | ) | | — |
| | 26,827 |
| | — |
|
Provision for income taxes | (82 | ) | | (136 | ) | | (509 | ) | | (383 | ) |
Income (loss) from continuing operations before gain on sale of real estate assets | (1,412 | ) | | (26,372 | ) | | 9,822 |
| | (38,971 | ) |
Gain on sale of real estate assets | — |
| | — |
| | 32,496 |
| | — |
|
Income (loss) from continuing operations | (1,412 | ) | | (26,372 | ) | | 42,318 |
| | (38,971 | ) |
Discontinued operations | — |
| | — |
| | — |
| | — |
|
Net income (loss) | $ | (1,412 | ) | | $ | (26,372 | ) | | $ | 42,318 |
| | $ | (38,971 | ) |
Net (income) loss attributable to non-controlling interests | 110 |
| | (194 | ) | | 100 |
| | (194 | ) |
Net income (loss) attributable to Rouse Properties Inc. | $ | (1,302 | ) | | $ | (26,566 | ) | | $ | 42,418 |
| | $ | (39,165 | ) |
| | | | | | | |
| | | | | | | |
Net income (loss) per share attributable to Rouse Properties Inc - Basic(1) | $ | (0.02 | ) | | $ | (0.46 | ) | | $ | 0.73 |
| | $ | (0.69 | ) |
| | | | | | | |
Net income (loss) per share attributable to Rouse Properties Inc - Diluted (2) | $ | (0.02 | ) | | $ | (0.46 | ) | | $ | 0.73 |
| | $ | (0.69 | ) |
| | | | | | | |
Dividends declared per share | $ | 0.18 |
| | $ | 0.17 |
| | $ | 0.54 |
| | $ | 0.51 |
|
| | | | | | | |
Other comprehensive income (loss): | | | | | | | |
Net income (loss) | $ | (1,412 | ) | | $ | (26,372 | ) | | $ | 42,318 |
| | $ | (38,971 | ) |
Other comprehensive loss: | | | | | | | |
Unrealized gain (loss) on financial instrument | (1,091 | ) | | 425 |
| | (1,327 | ) | | (230 | ) |
Comprehensive income (loss) | $ | (2,503 | ) | | $ | (25,947 | ) | | $ | 40,991 |
| | $ | (39,201 | ) |
(1) Calculated using weighted average number of shares of 57,930,453 and 57,519,412 for the three months ended September 30, 2015 and 2014, respectively, and 57,756,035 and 57,062,578 for the nine months ended September 30, 2015 and 2014, respectively,
(2) Calculated using weighted average number of shares of 57,930,453 and 57,519,412 for the three months ended September 30, 2015 and 2014, respectively, and 58,121,349 and 57,062,578 for the nine months ended September 30, 2015 and 2014, respectively,
Consolidated Balance Sheets
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| | | | | | | | |
(In thousands) | | September 30, 2015 (Unaudited) | | December 31, 2014 (Unaudited) |
| | | | |
Assets: | | |
| | |
|
Investment in real estate: | | |
| | |
|
Land | | $ | 378,855 |
| | $ | 371,363 |
|
Buildings and equipment | | 1,964,294 |
| | 1,820,072 |
|
Less accumulated depreciation | | (222,050 | ) | | (189,838 | ) |
Net investment in real estate | | 2,121,099 |
| | 2,001,597 |
|
Cash and cash equivalents | | 6,277 |
| | 14,308 |
|
Restricted cash | | 40,521 |
| | 48,055 |
|
Accounts receivable, net | | 36,979 |
| | 35,492 |
|
Deferred expenses, net | | 52,584 |
| | 52,611 |
|
Prepaid expenses and other assets, net | | 52,145 |
| | 62,690 |
|
Assets of property held for sale | | — |
| | 55,647 |
|
Total assets | | $ | 2,309,605 |
| | $ | 2,270,400 |
|
| | | | |
Liabilities: | | |
| | |
|
Mortgages, notes and loans payable, net | | $ | 1,637,430 |
| | $ | 1,584,499 |
|
Accounts payable and accrued expenses, net | | 123,655 |
| | 113,976 |
|
Liabilities of property held for sale | | — |
| | 38,590 |
|
Total liabilities | | 1,761,085 |
| | 1,737,065 |
|
| | | | |
Commitments and contingencies | | — |
| | — |
|
| | | | |
Equity: | | |
| | |
|
Preferred stock (1) | | — |
| | — |
|
Common stock (2) | | 580 |
| | 578 |
|
Additional paid-in capital | | 654,304 |
| | 679,275 |
|
Accumulated deficit | | (120,463 | ) | | (162,881 | ) |
Accumulated other comprehensive loss | | (1,809 | ) | | (482 | ) |
Total stockholders' equity | | 532,612 |
| | 516,490 |
|
Non-controlling interest | | 15,908 |
| | 16,845 |
|
Total equity | | 548,520 |
| | 533,335 |
|
Total liabilities and equity | | $ | 2,309,605 |
| | $ | 2,270,400 |
|
(1) Preferred stock: $0.01 par value; 50,000,000 shares authorized, no shares issued and outstanding as of September 30, 2015 and December 31, 2014.
(2) Common stock: $0.01 par value; 500,000,000 shares authorized, 58,084,620 issued and 58,022,217 outstanding as of September 30, 2015 and 57,748,141 issued and 57,743,981 outstanding as of December 31, 2014.
.
Reconciliation of Core NOI and Core FFO - For the Three Month Period Ended |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2015 | | September 30, 2014 |
(In thousands, except per share amounts) | | (Unaudited) | | (Unaudited) |
| | Consolidated | | Non-controlling Interest (1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO | | Consolidated | | Non-controlling Interest (1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO |
| | | | | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Minimum rents (2) | | $ | 52,035 |
| | $ | (1,078 | ) | | $ | 50,957 |
| | $ | 980 |
| | $ | 51,937 |
| | $ | 51,817 |
| | $ | (369 | ) | | $ | 51,448 |
| | $ | 2,347 |
| | $ | 53,795 |
|
Tenant recoveries | | 19,069 |
| | (383 | ) | | 18,686 |
| | — |
| | 18,686 |
| | 20,518 |
| | (121 | ) | | 20,397 |
| | — |
| | 20,397 |
|
Overage rents | | 881 |
| | 11 |
| | 892 |
| | — |
| | 892 |
| | 726 |
| | (2 | ) | | 724 |
| | — |
| | 724 |
|
Other | | 1,568 |
| | (24 | ) | | 1,544 |
| | — |
| | 1,544 |
| | 1,722 |
| | (2 | ) | | 1,720 |
| | — |
| | 1,720 |
|
Total revenues | | 73,553 |
| | (1,474 | ) | | 72,079 |
| | 980 |
| | 73,059 |
|
| 74,783 |
| | (494 | ) | | 74,289 |
| | 2,347 |
| | 76,636 |
|
Operating Expenses: | | | | | |
| | | | | | | | | |
| | | | |
Property operating costs (3) | | 17,537 |
| | (281 | ) | | 17,256 |
| | (39 | ) | | 17,217 |
| | 18,639 |
| | (60 | ) | | 18,579 |
| | (39 | ) | | 18,540 |
|
Real estate taxes | | 5,694 |
| | (214 | ) | | 5,480 |
| | — |
| | 5,480 |
| | 7,287 |
| | (59 | ) | | 7,228 |
| | — |
| | 7,228 |
|
Property maintenance costs | | 1,864 |
| | (20 | ) | | 1,844 |
| | — |
| | 1,844 |
| | 2,394 |
| | (5 | ) | | 2,389 |
| | — |
| | 2,389 |
|
Marketing | | 419 |
| | (11 | ) | | 408 |
| | — |
| | 408 |
| | 572 |
| | — |
| | 572 |
| | — |
| | 572 |
|
Provision for doubtful accounts | | 759 |
| | (43 | ) | | 716 |
| | — |
| | 716 |
| | 271 |
| | — |
| | 271 |
| | — |
| | 271 |
|
Total operating expenses | | 26,273 |
| | (569 | ) | | 25,704 |
| | (39 | ) | | 25,665 |
| | 29,163 |
| | (124 | ) | | 29,039 |
| | (39 | ) | | 29,000 |
|
| | | | | |
| | | | | | | | | |
| | | | |
Net operating income | | 47,280 |
| | (905 | ) | | 46,375 |
| | 1,019 |
| | 47,394 |
| | 45,620 |
| | (370 | ) | | 45,250 |
| | 2,386 |
| | 47,636 |
|
| | | | | |
| | | | | | | | | |
| | | | |
General and administrative (4)(5) | | 6,327 |
| | — |
| | 6,327 |
| | (5 | ) | | 6,322 |
| | 6,132 |
| | — |
| | 6,132 |
| | (35 | ) | | 6,097 |
|
Other (6) | | 1,254 |
| | — |
| | 1,254 |
| | (1,254 | ) | | — |
| | 1,371 |
| | — |
| | 1,371 |
| | (1,371 | ) | | — |
|
Subtotal | | 39,699 |
| | (905 | ) | | 38,794 |
| | 2,278 |
| | 41,072 |
| | 38,117 |
| | (370 | ) | | 37,747 |
| | 3,792 |
| | 41,539 |
|
| | | | | |
| | | | | | | | | |
| | | | |
Interest income | | 4 |
| | — |
| | 4 |
| | — |
| | 4 |
| | 34 |
| | — |
| | 34 |
| | — |
| | 34 |
|
Interest expense | | | | | | — |
| | | | | | | | | | — |
| | | | |
Amortization and write-off of market rate adjustments | | 272 |
| | — |
| | 272 |
| | (272 | ) | | — |
| | (7,129 | ) | | — |
| | (7,129 | ) | | 7,129 |
| | — |
|
Amortization and write-off of deferred financing costs | | (1,750 | ) | | — |
| | (1,750 | ) | — |
| 1,750 |
| | — |
| | (1,267 | ) | | — |
| | (1,267 | ) | | 1,267 |
| | — |
|
Debt extinguishment costs | | — |
| | — |
| | — |
| | — |
| | — |
| | (259 | ) | | — |
| | (259 | ) | | 259 |
| | — |
|
Interest on debt | | (16,632 | ) | | 365 |
| | (16,267 | ) | | — |
| | (16,267 | ) | | (17,937 | ) | | 78 |
| | (17,859 | ) | | — |
| | (17,859 | ) |
Provision for income taxes | | (82 | ) | | — |
| | (82 | ) | | 82 |
| | — |
| | (136 | ) | | — |
| | (136 | ) | | 136 |
| | — |
|
Funds from operations | | $ | 21,511 |
| | $ | (540 | ) | | $ | 20,971 |
| | $ | 3,838 |
| | $ | 24,809 |
| | $ | 11,423 |
| | $ | (292 | ) | | $ | 11,131 |
| | $ | 12,583 |
| | $ | 23,714 |
|
Funds from operations per share - basic (7) | |
| | | |
| |
| | $ | 0.43 |
| |
| | | |
| |
| | $ | 0.41 |
|
Funds from operations per share - diluted (8) | |
| | | |
| |
| | $ | 0.43 |
| |
| | | |
| |
| | $ | 0.41 |
|
(1) Represents our partner's share of operations from consolidated properties.
(2) Core adjustments include the aggregate amounts for straight-line rent of $(408) and $(97), above / below market lease amortization of $1,299 and $2,433 and tenant inducement amortization of $89 and $11 for the three months ended September 30, 2015 and 2014, respectively.
(3) Core adjustments include above / below market ground lease amortization of $39 and $39 for the three months ended September 30, 2015 and 2014, respectively.
(4) General and administrative costs include $710 and $960 of non-cash stock compensation expense for the three months ended September 30, 2015 and 2014, respectively.
(5) Core adjustments include amounts for the corporate and regional office straight-line rent of $5 and $35 for the three months ended September 30, 2015 and 2014, respectively.
(6) Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield's IT platform on to Rouse's IT platform.
(7) Calculated using weighted average number of shares of common stock of 57,930,453 and 57,519,412 for the three months ended September 30, 2015 and 2014, respectively.
(8) Assumes 58,194,064 and 58,002,235 diluted shares of common stock for the three months ended September 30, 2015 and 2014, respectively.
Reconciliation of Core NOI and Core FFO - For the Nine Month Period Ended |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2015 | | September 30, 2014 |
(In thousands, except per share amounts) | | (Unaudited) | | (Unaudited) |
| | Consolidated | | Non-controlling Interest (1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO | | Consolidated | | Non-controlling Interest (1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO |
| | | | | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Minimum rents (2) | | $ | 154,339 |
| | $ | (3,178 | ) | | $ | 151,161 |
| | $ | 4,875 |
| | $ | 156,036 |
| | $ | 144,608 |
| | $ | (369 | ) | | $ | 144,239 |
| | $ | 8,666 |
| | $ | 152,905 |
|
Tenant recoveries | | 57,910 |
| | (1,045 | ) | | 56,865 |
| | — |
| | 56,865 |
| | 58,430 |
| | (121 | ) | | 58,309 |
| | — |
| | 58,309 |
|
Overage rents | | 3,204 |
| | (33 | ) | | 3,171 |
| | — |
| | 3,171 |
| | 2,664 |
| | (2 | ) | | 2,662 |
| | — |
| | 2,662 |
|
Other | | 5,070 |
| | (60 | ) | | 5,010 |
| | — |
| | 5,010 |
| | 4,711 |
| | (2 | ) | | 4,709 |
| | — |
| | 4,709 |
|
Total revenues | | 220,523 |
| | (4,316 | ) | | 216,207 |
| | 4,875 |
| | 221,082 |
|
| 210,413 |
| | (494 | ) | | 209,919 |
| | 8,666 |
| | 218,585 |
|
Operating Expenses: | | | | | | | | | | | | | | | | | | | | |
Property operating costs (3) | | 51,502 |
| | (809 | ) | | 50,693 |
| | (116 | ) | | 50,577 |
| | 52,535 |
| | (60 | ) | | 52,475 |
| | (106 | ) | | 52,369 |
|
Real estate taxes | | 20,049 |
| | (568 | ) | | 19,481 |
| | — |
| | 19,481 |
| | 19,553 |
| | (59 | ) | | 19,494 |
| | — |
| | 19,494 |
|
Property maintenance costs | | 7,558 |
| | (99 | ) | | 7,459 |
| | — |
| | 7,459 |
| | 8,170 |
| | (5 | ) | | 8,165 |
| | — |
| | 8,165 |
|
Marketing | | 1,357 |
| | (31 | ) | | 1,326 |
| | — |
| | 1,326 |
| | 1,653 |
| | — |
| | 1,653 |
| | — |
| | 1,653 |
|
Provision for doubtful accounts | | 1,317 |
| | 16 |
| | 1,333 |
| | — |
| | 1,333 |
| | 659 |
| | — |
| | 659 |
| | — |
| | 659 |
|
Total operating expenses | | 81,783 |
| | (1,491 | ) | | 80,292 |
| | (116 | ) | | 80,176 |
| | 82,570 |
| | (124 | ) | | 82,446 |
| | (106 | ) | | 82,340 |
|
| | | | | | | | | | | | | | | | | | | | |
Net operating income | | 138,740 |
| | (2,825 | ) | | 135,915 |
| | 4,991 |
| | 140,906 |
| | 127,843 |
| | (370 | ) | | 127,473 |
| | 8,772 |
| | 136,245 |
|
| | | | | | | | | | | | | | | | | | | | |
General and administrative (4)(5) | | 19,685 |
| | — |
| | 19,685 |
| | (14 | ) | | 19,671 |
| | 18,613 |
| | — |
| | 18,613 |
| | (56 | ) | | 18,557 |
|
Other (6) | | 5,205 |
| | — |
| | 5,205 |
| | (5,205 | ) | | — |
| | 2,631 |
| | — |
| | 2,631 |
| | (2,631 | ) | | — |
|
Subtotal | | 113,850 |
| | (2,825 | ) | | 111,025 |
| | 10,210 |
| | 121,235 |
| | 106,599 |
| | (370 | ) | | 106,229 |
| | 11,459 |
| | 117,688 |
|
| | | | | | | | | | | | | | | | | | | | |
Interest income | | 18 |
| | — |
| | 18 |
| | — |
| | 18 |
| | 310 |
| | — |
| | 310 |
| | — |
| | 310 |
|
Interest expense | | | | | | | | | | | | | | | | | | | | |
Amortization and write-off of market rate adjustments | | 516 |
| | — |
| | 516 |
| | (516 | ) | | — |
| | (9,015 | ) | | — |
| | (9,015 | ) | | 9,015 |
| | — |
|
Amortization and write-off of deferred financing costs | | (3,400 | ) | | — |
| | (3,400 | ) | | 3,400 |
| | — |
| | (3,420 | ) | | — |
| | (3,420 | ) | | 3,420 |
| | — |
|
Debt extinguishment costs | | — |
| | — |
| | — |
| | — |
| | — |
| | (259 | ) | | — |
| | (259 | ) | | 259 |
| | — |
|
Interest on debt | | (51,861 | ) | | 1,083 |
| | (50,778 | ) | | — |
| | (50,778 | ) | | (50,545 | ) | | 78 |
| | (50,467 | ) | | — |
| | (50,467 | ) |
Provision for income taxes | | (509 | ) | | — |
| | (509 | ) | | 509 |
| | — |
| | (383 | ) | | — |
| | (383 | ) | | 383 |
| | — |
|
Funds from operations | | $ | 58,614 |
| | $ | (1,742 | ) | | $ | 56,872 |
| | $ | 13,603 |
| | $ | 70,475 |
| | $ | 43,287 |
| | $ | (292 | ) | | $ | 42,995 |
| | $ | 24,536 |
| | $ | 67,531 |
|
Funds from operations per share - basic (7) | |
| | | | | | | | $ | 1.22 |
| | | | | | | | | | $ | 1.18 |
|
Funds from operations per share - diluted (8) | |
| | | | | | | | $ | 1.21 |
| | | | | | | | | | $ | 1.16 |
|
(1) Represents our partner's share of operations from consolidated properties.
(2) Core adjustments include the aggregate amounts for straight-line rent of $(702) and $(1,184), above / below market lease amortization of $5,470 and $9,829 and tenant inducement amortization of $107 and $21 for the nine months ended September 30, 2015 and 2014, respectively.
(3) Core adjustments include above / below market ground lease amortization of $116 and $106 for the nine months ended September 30, 2015 and 2014, respectively.
(4) General and administrative costs include $2,220 and $2,737 of non-cash stock compensation expense for the nine months ended September 30, 2015 and 2014, respectively.
(5) Core adjustments include amounts for the corporate and regional office straight-line rent of $14 and $56 for the nine months ended September 30, 2015 and 2014, respectively.
(6) Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield's IT platform on to Rouse's IT platform.
(7) Calculated using weighted average number of shares of common stock of 57,756,035 and 57,062,578 for the nine months ended September 30, 2015 and 2014, respectively.
(8) Assumes 58,121,349 and 58,053,494 diluted shares of common stock for the nine months ended September 30, 2015 and 2014, respectively.
Reconciliation of Non-GAAP to GAAP Financial Measures
|
| | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
(In thousands) | September 30, 2015(unaudited) | | September 30, 2014 (unaudited) | | September 30, 2015(unaudited) | | September 30, 2014 (unaudited) |
| | | | | | | |
Reconciliation of NOI to GAAP Operating Income | | | | | | | |
Rouse NOI: | $ | 46,375 |
| | $ | 45,250 |
| | $ | 135,915 |
| | $ | 127,473 |
|
Non-controlling interest | 905 |
| | 370 |
| | 2,825 |
| | 370 |
|
General and administrative | (6,327 | ) | | (6,132 | ) | | (19,685 | ) | | (18,613 | ) |
Other | (1,254 | ) | | (1,371 | ) | | (5,205 | ) | | (2,631 | ) |
Depreciation and amortization | (22,856 | ) | | (27,130 | ) | | (72,719 | ) | | (71,593 | ) |
Provision for impairment | — |
| | (10,665 | ) | | (2,900 | ) | | (10,665 | ) |
Operating income | $ | 16,843 |
| | $ | 322 |
| | $ | 38,231 |
| | $ | 24,341 |
|
| | | | | | | |
Reconciliation of FFO to GAAP Net income (loss) attributable to Rouse Properties Inc. | | | | | | | |
FFO: | $ | 20,971 |
| | $ | 11,131 |
| | $ | 56,872 |
| | $ | 42,995 |
|
Non-controlling interest - Depreciation and amortization | 650 |
| | 98 |
| | 1,842 |
| | 98 |
|
Depreciation and amortization | (22,856 | ) | | (27,130 | ) | | (72,719 | ) | | (71,593 | ) |
Provision for impairment | — |
| | (10,665 | ) | | (2,900 | ) | | (10,665 | ) |
Gain (loss) on extinguishment of debt | (67 | ) | | — |
| | 26,827 |
| | — |
|
Gain on sale of real estate assets | — |
| | — |
| | 32,496 |
| | — |
|
Net income (loss) attributable to Rouse Properties Inc. | $ | (1,302 | ) | | $ | (26,566 | ) | | $ | 42,418 |
| | $ | (39,165 | ) |
| | | | | | | |
Weighted average number of shares outstanding - basic | 57,930,453 |
| | 57,519,412 |
| | 57,756,035 |
| | 57,062,578 |
|
Weighted average number of shares outstanding - diluted | 57,930,453 |
| | 57,519,412 |
| | 58,121,349 |
| | 57,062,578 |
|
| | | | | | | |
Net income (loss) per share attributable to Rouse Properties Inc.- Basic | $ | (0.02 | ) | | $ | (0.46 | ) | | $ | 0.73 |
| | $ | (0.69 | ) |
| | | | | | | |
Net income (loss) per share attributable to Rouse Properties Inc.- Diluted | $ | (0.02 | ) | | $ | (0.46 | ) | | $ | 0.73 |
| | $ | (0.69 | ) |
.
Source: Rouse Properties, Inc.
Rouse Properties, Inc.
Investor Relations, 212-608-5108
IR@rouseproperties.com
Supplemental Information
for the Quarter Ended September 30, 2015
Basis of Presentation
Background
Rouse is a publicly traded real estate investment trust (REIT) focused on the management, redevelopment, repositioning and acquisition of regional malls. The portfolio at the end of the quarter consisted of 35 geographically diverse enclosed malls, encompassing over 24.1 million square feet in 21 states. On January 12, 2012, General Growth Properties, Inc. (NYSE: GGP) completed the spin-off of Rouse Properties, Inc. (NYSE: RSE) through the distribution of shares of Rouse common stock to holders of GGP common stock. On March 26, 2012, Rouse completed its rights offering and issued 13,333,333 shares of common stock for $191.6 million of net proceeds. On January 13, 2014, Rouse issued 8,050,000 shares of common stock in its equity offering for $150.7 million of net proceeds before deducting for offering expenses.
General Information
Unless the context indicates otherwise, references in the accompanying financial information (the "Supplemental") to the "Corporation", "Rouse", or the "Company" refer to Rouse Properties Inc. Additionally, where reference is made to "GAAP", this refers to accounting principles generally accepted in the United States.
Non-GAAP Measures
The Company makes reference to net operating income (“NOI”) and funds from operations (“FFO”). NOI is defined as operating revenues (minimum rents, including lease termination fees, tenant recoveries, overage rents, and other income) less property and related expenses (property operating expenses, real estate taxes, repairs and maintenance, marketing, other property operating costs, and provision for doubtful accounts). FFO is defined as net income (loss) attributable to common stockholders in accordance with GAAP, excluding impairment write-downs on depreciable real estate, gains (or losses) from cumulative effects of accounting changes, extraordinary items and sales of properties, plus real estate related depreciation and amortization.
In order to present operations in a manner most relevant to its future operations, Core FFO and Core NOI have been presented to exclude certain non-cash and non-recurring revenue and expenses. A reconciliation of NOI to Core NOI and FFO to Core FFO has been included in the "Reconciliation of Core NOI and Core FFO" schedule included within.
NOI, FFO and derivations thereof, are not alternatives to GAAP operating income (loss) or net income (loss) available to common stockholders. For reference, as an aid in understanding management's computation of NOI and FFO, a reconciliation of NOI to operating income and FFO to net income (loss) in accordance with GAAP has been included in the "Reconciliation of Non-GAAP to GAAP Financial Measures" schedule.
Table of Contents ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
|
| | |
| | Page |
Company Information | | |
| | |
Financial Overview | | |
Consolidated Balance Sheets | | |
Consolidated Statements of Operations and Comprehensive Income (Loss) | | |
| | |
Financial Schedules | | |
Reconciliation of Core NOI and Core FFO - For the Three Month Period Ended | | |
Reconciliation of Core NOI and Core FFO - For the Nine Month Period Ended | | |
Core NOI Summary | | |
Reconciliation of Non-GAAP to GAAP Financial Measures | | |
Mortgages, Notes and Loans Payable | | |
Prepaid Expenses and Other Assets and Accounts Payable and Accrued Expenses | | |
| | |
Portfolio Operating Metrics | | |
Capital Expenditures | | |
Key Operating Performance Indicators | | |
Summary of Properties | | |
Lease Expiration Schedule | | |
Top Ten Tenants | | |
Leasing Activity | | |
| | |
Glossary of Terms | | |
The presentation contains forward-looking statements. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons. Readers are referred to the documents filed by Rouse Properties, Inc. with the Securities and Exchange Commission, which further identify the important risk factors which could cause actual results to differ materially from the forward-looking statements in the Supplemental. The Company disclaims any obligation to update any forward-looking statements.
Company Information
Company Contacts
|
| | | |
Andrew Silberfein | Chief Executive Officer | | |
Brian Harper | Chief Operating Officer | | |
Susan Elman | Executive Vice President, General Counsel | | |
John Wain | Chief Financial Officer | | |
Michael Grant | Chief Accounting Officer | | |
Brad Cohen/Steve Swett | ICR, Investor Relations and Communications | ir@rouseproperties.com | (212) 608-5108 |
Research Coverage
|
| | | |
Bank of America/Merrill Lynch | Craig Schmidt | craig.schmidt@baml.com | (646) 855-3640 |
Barclays Capital | Ross Smotrich | ross.smotrich@barcap.com | (212) 526-2306 |
Canaccord Genuity | Paul Morgan | pmorgan@canaccordgenuity.com | (415) 325-7269 |
Green Street Advisors | Daniel Busch | dbusch@greenstreetadvisors.com | (949) 640-8780 |
KeyBanc | Todd Thomas | tthomas@key.com | (917) 368-2286 |
RBC | Richard Moore | rich.moore@rbccm.com | (440) 715-2646 |
Stifel Nicolaus | Nathan Isbee | isbeen@stifel.com | (443) 224-1346 |
Dividend
| |
• | The Board of Directors declared a common stock dividend of $0.18 per share payable on January 29, 2016 to stockholders of record on January15, 2016. |
Common Share Trading Statistics
|
| | | | | | | | | | | | |
| | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
High | | $ | 18.19 |
| | $ | 19.44 |
| | $ | 21.17 |
|
Low | | $ | 15.15 |
| | $ | 16.01 |
| | $ | 17.18 |
|
Close | | $ | 15.58 |
| | $ | 16.35 |
| | $ | 18.96 |
|
Volume | | 12,721,400 |
| | 11,173,200 |
| | 15,911,500 |
|
|
| | |
Q3 2015 Supplemental Package | | 3 |
Shares Outstanding
|
| | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, 2015 | | September 30, 2014 | | September 30, 2015 | | September 30, 2014 |
Total common shares outstanding | 58,022,217 | | 57,742,605 |
| | 58,022,217 | | 57,742,605 |
Net number of common shares issuable assuming exercise of stock options (1) | 183,413 | | 259,630 |
| | 292,786 | | 310,889 |
Total common shares - diluted | 58,205,630 | | 58,002,235 |
| | 58,315,003 |
| 58,053,494 |
Weighted average common shares outstanding - diluted (FFO)(2) | 58,194,064 | | 58,002,235 |
| | 58,121,349 | | 58,053,494 |
Weighted average common shares outstanding - basic (GAAP)(3) | 57,930,453 | | 57,519,412 |
| | 57,756,035 | | 57,062,578 |
Weighted average common shares outstanding - diluted (GAAP)(3)(4) | 57,930,453 | | 57,519,412 |
| | 58,121,349 | | 57,062,578 |
(1) Based upon the weighted average stock price for the three and nine months ended September 30, 2015.
(2) Utilized for Funds From Operations (FFO) and Core Funds From Operations (Core FFO) purposes.
(3) Calculated in accordance with GAAP for the three and nine months ended September 30, 2015 and 2014.
(4) Dilutive shares are excluded, with the exception of the period for the nine months ended September 30, 2015, as the Company was in a net loss from continuing operations position and their effects were anti-dilutive.
|
| | |
Q3 2015 Supplemental Package | | 4 |
Financial Overview ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Consolidated Balance Sheets
|
| | | | | | | | |
(In thousands) |
| September 30, 2015 (Unaudited) |
| December 31, 2014 |
|
|
|
|
|
Assets: |
| |
|
| |
|
Investment in real estate: |
| |
|
| |
|
Land |
| $ | 378,855 |
| | $ | 371,363 |
|
Buildings and equipment |
| 1,964,294 |
| | 1,820,072 |
|
Less accumulated depreciation |
| (222,050 | ) | | (189,838 | ) |
Net investment in real estate |
| 2,121,099 |
| | 2,001,597 |
|
Cash and cash equivalents |
| 6,277 |
| | 14,308 |
|
Restricted cash | | 40,521 |
| | 48,055 |
|
Accounts receivable, net |
| 36,979 |
| | 35,492 |
|
Deferred expenses, net |
| 52,584 |
| | 52,611 |
|
Prepaid expenses and other assets, net |
| 52,145 |
| | 62,690 |
|
Assets of property held for sale | | — |
| | 55,647 |
|
Total assets |
| $ | 2,309,605 |
| | $ | 2,270,400 |
|
|
|
|
|
|
|
|
Liabilities: |
| |
|
| |
|
Mortgages, notes and loans payable, net |
| $ | 1,637,430 |
|
| $ | 1,584,499 |
|
Accounts payable and accrued expenses, net |
| 123,655 |
|
| 113,976 |
|
Liabilities of property held for sale | | — |
| | 38,590 |
|
Total liabilities |
| 1,761,085 |
| | 1,737,065 |
|
|
|
|
|
|
|
|
Commitments and contingencies |
| — |
|
| — |
|
|
|
|
|
|
|
|
Equity: |
| |
|
| |
|
Preferred Stock (1) | | — |
| | — |
|
Common stock (2) |
| 580 |
|
| 578 |
|
Additional paid-in capital |
| 654,304 |
|
| 679,275 |
|
Accumulated deficit |
| (120,463 | ) |
| (162,881 | ) |
Accumulated other comprehensive loss | | (1,809 | ) | | (482 | ) |
Total stockholders' equity |
| 532,612 |
| | 516,490 |
|
Non-controlling interest |
| 15,908 |
|
| 16,845 |
|
Total equity |
| 548,520 |
| | 533,335 |
|
Total liabilities and equity |
| $ | 2,309,605 |
| | $ | 2,270,400 |
|
(1) Preferred stock: $0.01 par value; 50,000,000 shares authorized, no shares issued and outstanding as of September 30, 2015 and December 31, 2014.
(2) Common stock: $0.01 par value; 500,000,000 shares authorized, 58,084,620 issued and 58,022,217 outstanding as of September 30, 2015 and 57,748,141 issued and 57,743,981 outstanding as of December 31, 2014.
|
| | |
Q3 2015 Supplemental Package | | 5 |
Financial Overview ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Consolidated Statements of Operations and Comprehensive Income (Loss) |
| | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
(In thousands, except per share amounts) | September 30, 2015 (Unaudited) | | September 30, 2014 (Unaudited) | | September 30, 2015 (Unaudited) | | September 30, 2014 (Unaudited) |
Revenues: | |
| | |
| | | | |
Minimum rents | $ | 52,035 |
| | $ | 51,817 |
| | $ | 154,339 |
| | $ | 144,608 |
|
Tenant recoveries | 19,069 |
| | 20,518 |
| | 57,910 |
| | 58,430 |
|
Overage rents | 881 |
| | 726 |
| | 3,204 |
| | 2,664 |
|
Other | 1,568 |
| | 1,722 |
| | 5,070 |
| | 4,711 |
|
Total revenues | 73,553 |
| | 74,783 |
| | 220,523 |
| | 210,413 |
|
Expenses: | |
| | |
| | | | |
Property operating costs | 17,537 |
| | 18,639 |
| | 51,502 |
| | 52,535 |
|
Real estate taxes | 5,694 |
| | 7,287 |
| | 20,049 |
| | 19,553 |
|
Property maintenance costs | 1,864 |
| | 2,394 |
| | 7,558 |
| | 8,170 |
|
Marketing | 419 |
| | 572 |
| | 1,357 |
| | 1,653 |
|
Provision for doubtful accounts | 759 |
| | 271 |
| | 1,317 |
| | 659 |
|
General and administrative | 6,327 |
| | 6,132 |
| | 19,685 |
| | 18,613 |
|
Provision for impairment | — |
| | 10,665 |
| | 2,900 |
| | 10,665 |
|
Depreciation and amortization | 22,856 |
| | 27,130 |
| | 72,719 |
| | 71,593 |
|
Other | 1,254 |
| | 1,371 |
| | 5,205 |
| | 2,631 |
|
Total operating expenses | 56,710 |
| | 74,461 |
| | 182,292 |
| | 186,072 |
|
Operating income | 16,843 |
| | 322 |
| | 38,231 |
| | 24,341 |
|
| | | | | | | |
Interest income | 4 |
| | 34 |
| | 18 |
| | 310 |
|
Interest expense | (18,110 | ) | | (26,592 | ) | | (54,745 | ) | | (63,239 | ) |
Gain (loss) on extinguishment of debt | (67 | ) | | — |
| | 26,827 |
| | — |
|
Provision for income taxes | (82 | ) | | (136 | ) | | (509 | ) | | (383 | ) |
Income (loss) from continuing operations before gain on sale of real estate assets | (1,412 | ) | | (26,372 | ) | | 9,822 |
| | (38,971 | ) |
Gain on sale of real estate assets | — |
| | — |
| | 32,496 |
| | — |
|
Income (loss) from continuing operations | $ | (1,412 | ) | | $ | (26,372 | ) | | $ | 42,318 |
| | $ | (38,971 | ) |
Discontinued operations | — |
| | — |
| | — |
| | — |
|
Net income (loss) | (1,412 | ) | | (26,372 | ) | | 42,318 |
| | (38,971 | ) |
Net (income) loss attributable to non-controlling interest | 110 |
| | (194 | ) | | 100 |
| | (194 | ) |
Net income (loss) attributable to Rouse Properties Inc. | $ | (1,302 | ) | | $ | (26,566 | ) | | $ | 42,418 |
| | $ | (39,165 | ) |
| | | | | | | |
Net income (loss) per share attributable to Rouse Properties Inc. - Basic(1) | $ | (0.02 | ) | | $ | (0.46 | ) | | $ | 0.73 |
| | $ | (0.69 | ) |
| | | | | | | |
Net income (loss) per share attributable to Rouse Properties Inc. - Diluted (2) | $ | (0.02 | ) | | $ | (0.46 | ) | | $ | 0.73 |
| | $ | (0.69 | ) |
| | | | | | | |
Dividends declared per share | $ | 0.18 |
| | $ | 0.17 |
| | $ | 0.54 |
| | $ | 0.51 |
|
| | | | | | | |
Other comprehensive income (loss): | | | | | | | |
Net income (loss) | $ | (1,412 | ) | | $ | (26,372 | ) | | $ | 42,318 |
| | $ | (38,971 | ) |
Other comprehensive loss: | | | | | | | |
Unrealized gain (loss) on financial instrument | (1,091 | ) | | 425 |
| | (1,327 | ) | | (230 | ) |
Comprehensive income (loss) | $ | (2,503 | ) | | $ | (25,947 | ) | | $ | 40,991 |
| | $ | (39,201 | ) |
(1) Calculated using weighted average number of shares of 57,930,453 and 57,519,412 for the three months ended September 30, 2015 and 2014, respectively, and 57,756,035 and 57,062,578 for the nine months ended September 30, 2015 and 2014, respectively.
(2)Calculated using weighted average number of shares of 57,930,453 and 57,519,412 for the three months ended September 30, 2015 and 2014, respectively, and 58,121,349 and 57,062,578 for the nine months ended September 30, 2015 and 2014, respectively,
|
| | |
Q3 2015 Supplemental Package | | 6 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Reconciliation of Core NOI and Core FFO - For the Three Month Period Ended |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| September 30, 2015 | | September 30, 2014 |
(In thousands, except per share amounts) |
| (Unaudited) | | (Unaudited) |
|
| Consolidated |
| Non-controlling Interest (1) | | Rouse Total |
| Core Adjustments |
| Core NOI / FFO | | Consolidated |
| Non-controlling Interest (1) | | Rouse Total |
| Core Adjustments |
| Core NOI / FFO |
| | | | | | | | | | | | | | | | | | | | |
Revenues: |
| | | | | | | | | | | | | | | | | | | |
Minimum rents (2) |
| $ | 52,035 |
|
| $ | (1,078 | ) | | $ | 50,957 |
|
| $ | 980 |
|
| $ | 51,937 |
| | $ | 51,817 |
|
| $ | (369 | ) | | $ | 51,448 |
|
| $ | 2,347 |
|
| $ | 53,795 |
|
Tenant recoveries |
| 19,069 |
|
| (383 | ) | | 18,686 |
|
| — |
|
| 18,686 |
| | 20,518 |
|
| (121 | ) | | 20,397 |
|
| — |
|
| 20,397 |
|
Overage rents |
| 881 |
|
| 11 |
| | 892 |
|
| — |
|
| 892 |
| | 726 |
|
| (2 | ) | | 724 |
|
| — |
|
| 724 |
|
Other |
| 1,568 |
|
| (24 | ) | | 1,544 |
|
| — |
|
| 1,544 |
| | 1,722 |
|
| (2 | ) | | 1,720 |
|
| — |
|
| 1,720 |
|
Total revenues |
| 73,553 |
|
| (1,474 | ) | | 72,079 |
|
| 980 |
|
| 73,059 |
|
| 74,783 |
|
| (494 | ) | | 74,289 |
|
| 2,347 |
|
| 76,636 |
|
Operating Expenses: |
| | | | |
| | | | | | | | | |
| | | | |
Property operating costs (3) |
| 17,537 |
|
| (281 | ) | | 17,256 |
|
| (39 | ) |
| 17,217 |
| | 18,639 |
|
| (60 | ) | | 18,579 |
|
| (39 | ) |
| 18,540 |
|
Real estate taxes |
| 5,694 |
|
| (214 | ) | | 5,480 |
|
| — |
|
| 5,480 |
| | 7,287 |
|
| (59 | ) | | 7,228 |
|
| — |
|
| 7,228 |
|
Property maintenance costs |
| 1,864 |
|
| (20 | ) | | 1,844 |
|
| — |
|
| 1,844 |
| | 2,394 |
|
| (5 | ) | | 2,389 |
|
| — |
|
| 2,389 |
|
Marketing |
| 419 |
|
| (11 | ) | | 408 |
|
| — |
|
| 408 |
| | 572 |
|
| — |
| | 572 |
|
| — |
|
| 572 |
|
Provision for doubtful accounts |
| 759 |
|
| (43 | ) | | 716 |
|
| — |
|
| 716 |
| | 271 |
|
| — |
| | 271 |
|
| — |
|
| 271 |
|
Total operating expenses |
| 26,273 |
|
| (569 | ) | | 25,704 |
|
| (39 | ) |
| 25,665 |
| | 29,163 |
|
| (124 | ) | | 29,039 |
|
| (39 | ) |
| 29,000 |
|
| | | | | |
| | | | | | | | | |
| | | | |
Net operating income |
| 47,280 |
|
| (905 | ) | | 46,375 |
|
| 1,019 |
|
| 47,394 |
| | 45,620 |
|
| (370 | ) | | 45,250 |
|
| 2,386 |
|
| 47,636 |
|
| | | | | |
| | | | | | | | | |
| | | | |
General and administrative (4)(5) |
| 6,327 |
|
| — |
| | 6,327 |
|
| (5 | ) |
| 6,322 |
| | 6,132 |
|
| — |
| | 6,132 |
|
| (35 | ) |
| 6,097 |
|
Other (6) |
| 1,254 |
|
| — |
| | 1,254 |
|
| (1,254 | ) |
| — |
| | 1,371 |
|
| — |
| | 1,371 |
|
| (1,371 | ) |
| — |
|
Subtotal |
| 39,699 |
|
| (905 | ) | | 38,794 |
|
| 2,278 |
|
| 41,072 |
| | 38,117 |
|
| (370 | ) | | 37,747 |
|
| 3,792 |
|
| 41,539 |
|
| | | | | |
| | | | | | | | | |
| | | | |
Interest income |
| 4 |
|
| — |
| | 4 |
|
| — |
|
| 4 |
| | 34 |
|
| — |
| | 34 |
|
| — |
|
| 34 |
|
Interest expense |
| | | | |
| | | | | | | | | |
| | | | |
Amortization and write-off of market rate adjustments |
| 272 |
|
| — |
| | 272 |
|
| (272 | ) |
| — |
| | (7,129 | ) |
| — |
| | (7,129 | ) |
| 7,129 |
|
| — |
|
Amortization and write-off of deferred financing costs |
| (1,750 | ) |
| — |
| | (1,750 | ) |
| 1,750 |
|
| — |
| | (1,267 | ) |
| — |
| | (1,267 | ) |
| 1,267 |
|
| — |
|
Debt extinguishment costs |
| — |
|
| — |
| | — |
|
| — |
|
| — |
| | (259 | ) |
| — |
| | (259 | ) |
| 259 |
|
| — |
|
Interest on debt |
| (16,632 | ) |
| 365 |
| | (16,267 | ) |
| — |
|
| (16,267 | ) | | (17,937 | ) |
| 78 |
| | (17,859 | ) |
| — |
|
| (17,859 | ) |
Provision for income taxes |
| (82 | ) |
| — |
| | (82 | ) |
| 82 |
|
| — |
| | (136 | ) |
| — |
| | (136 | ) |
| 136 |
|
| — |
|
Funds from operations |
| $ | 21,511 |
|
| $ | (540 | ) | | $ | 20,971 |
|
| $ | 3,838 |
|
| $ | 24,809 |
| | $ | 11,423 |
|
| $ | (292 | ) | | $ | 11,131 |
|
| $ | 12,583 |
|
| $ | 23,714 |
|
Funds from operations per share - basic (7) |
|
|
| | |
|
|
|
| $ | 0.43 |
| |
|
| | |
|
|
|
| $ | 0.41 |
|
Funds from operations per share - diluted (8) |
|
|
| | |
|
|
|
| $ | 0.43 |
| |
|
| | |
|
|
|
| $ | 0.41 |
|
(1) Represents our partner's share of operations from consolidated properties.
(2) Core adjustments include the aggregate amounts for straight-line rent of $(408) and $(97), above / below market lease amortization of $1,299 and $2,433 and tenant inducement amortization of $89 and $11 for the three months ended September 30, 2015 and 2014, respectively.
(3) Core adjustments include above / below market ground lease amortization of $39 and $39 for the three months ended September 30, 2015 and 2014, respectively.
(4) General and administrative costs include $710 and $960 of non-cash stock compensation expense for the three months ended September 30, 2015 and 2014, respectively.
(5) Core adjustments include amounts for the corporate and regional office straight-line rent of $5 and $35 for the three months ended September 30, 2015 and 2014, respectively.
(6) Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield's IT platform on to Rouse's IT platform.
(7) Calculated using weighted average number of shares of common stock of 57,930,453 and 57,519,412 for the three months ended September 30, 2015 and 2014, respectively.
(8) Assumes 58,194,064 and 58,002,235 diluted shares of common stock for the three months ended September 30, 2015 and 2014, respectively.
|
| | |
Q3 2015 Supplemental Package | | 7 |
Financial Schedules
Reconciliation of Core NOI and Core FFO - For the Nine Month Period Ended |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2015 | | September 30, 2014 |
(In thousands, except per share amounts) | | (Unaudited) | | (Unaudited) |
| | Consolidated | | Non-controlling Interest (1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO | | Consolidated | | Non-controlling Interest (1) | | Rouse Total | | Core Adjustments | | Core NOI / FFO |
| | | | | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Minimum rents (2) | | $ | 154,339 |
| | $ | (3,178 | ) | | $ | 151,161 |
| | $ | 4,875 |
| | $ | 156,036 |
| | $ | 144,608 |
| | $ | (369 | ) | | $ | 144,239 |
| | $ | 8,666 |
| | $ | 152,905 |
|
Tenant recoveries | | 57,910 |
| | (1,045 | ) | | 56,865 |
| | — |
| | 56,865 |
| | 58,430 |
| | (121 | ) | | 58,309 |
| | — |
| | 58,309 |
|
Overage rents | | 3,204 |
| | (33 | ) | | 3,171 |
| | — |
| | 3,171 |
| | 2,664 |
| | (2 | ) | | 2,662 |
| | — |
| | 2,662 |
|
Other | | 5,070 |
| | (60 | ) | | 5,010 |
| | — |
| | 5,010 |
| | 4,711 |
| | (2 | ) | | 4,709 |
| | — |
| | 4,709 |
|
Total revenues | | 220,523 |
| | (4,316 | ) | | 216,207 |
| | 4,875 |
| | 221,082 |
|
| 210,413 |
| | (494 | ) | | 209,919 |
| | 8,666 |
| | 218,585 |
|
Operating Expenses: | | | | | | | | | | | | | | | | | | | | |
Property operating costs (3) | | 51,502 |
| | (809 | ) | | 50,693 |
| | (116 | ) | | 50,577 |
| | 52,535 |
| | (60 | ) | | 52,475 |
| | (106 | ) | | 52,369 |
|
Real estate taxes | | 20,049 |
| | (568 | ) | | 19,481 |
| | — |
| | 19,481 |
| | 19,553 |
| | (59 | ) | | 19,494 |
| | — |
| | 19,494 |
|
Property maintenance costs | | 7,558 |
| | (99 | ) | | 7,459 |
| | — |
| | 7,459 |
| | 8,170 |
| | (5 | ) | | 8,165 |
| | — |
| | 8,165 |
|
Marketing | | 1,357 |
| | (31 | ) | | 1,326 |
| | — |
| | 1,326 |
| | 1,653 |
| | — |
| | 1,653 |
| | — |
| | 1,653 |
|
Provision for doubtful accounts | | 1,317 |
| | 16 |
| | 1,333 |
| | — |
| | 1,333 |
| | 659 |
| | — |
| | 659 |
| | — |
| | 659 |
|
Total operating expenses | | 81,783 |
| | (1,491 | ) | | 80,292 |
| | (116 | ) | | 80,176 |
| | 82,570 |
| | (124 | ) | | 82,446 |
| | (106 | ) | | 82,340 |
|
| | | | | | | | | | | | | | | | | | | | |
Net operating income | | 138,740 |
| | (2,825 | ) | | 135,915 |
| | 4,991 |
| | 140,906 |
| | 127,843 |
| | (370 | ) | | 127,473 |
| | 8,772 |
| | 136,245 |
|
| | | | | | | | | | | | | | | | | | | | |
General and administrative (4)(5) | | 19,685 |
| | — |
| | 19,685 |
| | (14 | ) | | 19,671 |
| | 18,613 |
| | — |
| | 18,613 |
| | (56 | ) | | 18,557 |
|
Other (6) | | 5,205 |
| | — |
| | 5,205 |
| | (5,205 | ) | | — |
| | 2,631 |
| | — |
| | 2,631 |
| | (2,631 | ) | | — |
|
Subtotal | | 113,850 |
| | (2,825 | ) | | 111,025 |
| | 10,210 |
| | 121,235 |
| | 106,599 |
| | (370 | ) | | 106,229 |
| | 11,459 |
| | 117,688 |
|
| | | | | | | | | | | | | | | | | | | | |
Interest income | | 18 |
| | — |
| | 18 |
| | — |
| | 18 |
| | 310 |
| | — |
| | 310 |
| | — |
| | 310 |
|
Interest expense | | | | | | | | | | | | | | | | | | | | |
Amortization and write-off of market rate adjustments | | 516 |
| | — |
| | 516 |
| | (516 | ) | | — |
| | (9,015 | ) | | — |
| | (9,015 | ) | | 9,015 |
| | — |
|
Amortization and write-off of deferred financing costs | | (3,400 | ) | | — |
| | (3,400 | ) | | 3,400 |
| | — |
| | (3,420 | ) | | — |
| | (3,420 | ) | | 3,420 |
| | — |
|
Debt extinguishment costs | | — |
| | — |
| | — |
| | — |
| | — |
| | (259 | ) | | — |
| | (259 | ) | | 259 |
| | — |
|
Interest on debt | | (51,861 | ) | | 1,083 |
| | (50,778 | ) | | — |
| | (50,778 | ) | | (50,545 | ) | | 78 |
| | (50,467 | ) | | — |
| | (50,467 | ) |
Provision for income taxes | | (509 | ) | | — |
| | (509 | ) | | 509 |
| | — |
| | (383 | ) | | — |
| | (383 | ) | | 383 |
| | — |
|
Funds from operations | | $ | 58,614 |
| | $ | (1,742 | ) | | $ | 56,872 |
| | $ | 13,603 |
| | $ | 70,475 |
| | $ | 43,287 |
| | $ | (292 | ) | | $ | 42,995 |
| | $ | 24,536 |
| | $ | 67,531 |
|
Funds from operations per share - basic (7) | |
| | | | | | | | $ | 1.22 |
| | | | | | | | | | $ | 1.18 |
|
Funds from operations per share - diluted (8) | |
| | | | | | | | $ | 1.21 |
| | | | | | | | | | $ | 1.16 |
|
(1) Represents our partner's share of operations from consolidated properties.
(2) Core adjustments include the aggregate amounts for straight-line rent of $(702) and $(1,184), above / below market lease amortization of $5,470 and $9,829 and tenant inducement amortization of $107 and $21 for the nine months ended September 30, 2015 and 2014, respectively.
(3) Core adjustments include above / below market ground lease amortization of $116 and $106 for the nine months ended September 30, 2015 and 2014, respectively.
(4) General and administrative costs include $2,220 and $2,737 of non-cash stock compensation expense for the nine months ended September 30, 2015 and 2014, respectively.
(5) Core adjustments include amounts for the corporate and regional office straight-line rent of $14 and $56 for the nine months ended September 30, 2015 and 2014, respectively.
(6) Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield's IT platform on to Rouse's IT platform.
(7) Calculated using weighted average number of shares of common stock of 57,756,035 and 57,062,578 for the nine months ended September 30, 2015 and 2014, respectively.
(8) Assumes 58,121,349 and 58,053,494 diluted shares of common stock for the nine months ended September 30, 2015 and 2014, respectively.
|
| | |
Q3 2015 Supplemental Package | | 8 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Core NOI Summary
|
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
(In thousands) | | September 30, 2015 (Unaudited) | | September 30, 2014 (Unaudited) | | September 30, 2015 (Unaudited) | | September 30, 2014 (Unaudited) |
| | | | | | | | |
Consolidated net operating income | | $ | 47,280 |
| | $ | 45,620 |
| | $ | 138,740 |
| | $ | 127,843 |
|
Add / (less) : | | | | | | | | |
Non-controlling interests | | (905 | ) | | (370 | ) | | (2,825 | ) | | (370 | ) |
Core NOI adjustments | | 1,019 |
| | 2,386 |
| | 4,991 |
| | 8,772 |
|
Rouse core net operating income | | 47,394 |
| | 47,636 |
| | 140,906 |
| | 136,245 |
|
Add / (less): | | | | | | | | |
Non same property assets (1) | | (10,530 | ) | | (10,406 | ) | | (30,672 | ) | | (27,592 | ) |
Lease termination income and other | | (187 | ) | | (901 | ) | | (726 | ) | | (1,356 | ) |
Same property core net operating income(2) | | $ | 36,677 |
| | $ | 36,329 |
| | $ | 109,508 |
| | $ | 107,297 |
|
Same property change % | | 1.0 | % | | | | 2.1 | % | | |
(1) Represents Bel Air Mall, The Mall at Barnes Crossing, Mt. Shasta and Fig Garden, which were acquired in May 2014, August 2014, January 2015 and June 2015, respectively, and the disposition of The Shoppes at Knollwood Mall, Steeplegate Mall, and Collin Creek Mall, in January 2015, March 2015 and April 2015, respectively. Same Property portfolio also excludes Gateway Mall, NewPark Mall and Spring Hill Mall, which are undergoing redevelopment with significant disruption. Vista Ridge Mall is a special consideration asset, which is also excluded from our Same Property portfolio. An asset is designated as a special consideration asset when a property has a heightened probability of being conveyed to its lender absent substantive renegotiation.
(2) Same Property Core net operating income,includes legacy litigation expenses for the three months ended September 30,2015 and 2014 of $0.01 million and $0.07 million, respectively. Same Property Core net operating income,includes legacy litigation expenses for the nine months ended September 30,2015 and 2014 of $0.05 million and $0.8 million, respectively.
|
| | |
Q3 2015 Supplemental Package | | 9 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Reconciliation of Non-GAAP to GAAP Financial Measures
|
| | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
(In thousands, except per share) | September 30, 2015 (Unaudited) | | September 30, 2014 (Unaudited) | | September 30, 2015 (Unaudited) | | September 30, 2014 (Unaudited) |
| | | | | | | |
Reconciliation of NOI to GAAP Operating Income | | | | | | | |
Rouse NOI: | $ | 46,375 |
| | $ | 45,250 |
| | $ | 135,915 |
| | $ | 127,473 |
|
Non-controlling interest | 905 |
| | 370 |
| | 2,825 |
| | 370 |
|
General and administrative | (6,327 | ) | | (6,132 | ) | | (19,685 | ) | | (18,613 | ) |
Other | (1,254 | ) | | (1,371 | ) | | (5,205 | ) | | (2,631 | ) |
Depreciation and amortization | (22,856 | ) | | (27,130 | ) | | (72,719 | ) | | (71,593 | ) |
Provision for impairment | — |
| | (10,665 | ) | | (2,900 | ) | | (10,665 | ) |
Operating income | $ | 16,843 |
| | $ | 322 |
| | $ | 38,231 |
| | $ | 24,341 |
|
| | | | | | | |
Reconciliation of FFO to GAAP Net income (loss) attributable to Rouse Properties Inc. | | | | | | | |
FFO: | $ | 20,971 |
| | $ | 11,131 |
| | $ | 56,872 |
| | $ | 42,995 |
|
Non-controlling interest - Depreciation and amortization | 650 |
| | 98 |
| | 1,842 |
| | 98 |
|
Depreciation and amortization | (22,856 | ) | | (27,130 | ) | | (72,719 | ) | | (71,593 | ) |
Provision for impairment | — |
| | (10,665 | ) | | (2,900 | ) | | (10,665 | ) |
Gain (loss) on extinguishment of debt | (67 | ) | | — |
| | 26,827 |
| | — |
|
Gain on sale of real estate assets | — |
| | — |
| | 32,496 |
| | — |
|
Net income (loss) attributable to Rouse Properties Inc. | $ | (1,302 | ) | | $ | (26,566 | ) | | $ | 42,418 |
| | $ | (39,165 | ) |
| | | | | | | |
Weighted average number of shares outstanding - Basic | 57,930,453 |
| | 57,519,412 |
| | 57,756,035 |
| | 57,062,578 |
|
| | | | | | | |
Weighted average number of shares outstanding - Diluted | 57,930,453 |
| | 57,519,412 |
| | 58,121,349 |
| | 57,062,578 |
|
| | | | | | | |
Net income (loss) per share attributable to Rouse Properties Inc. - Basic | $ | (0.02 | ) | | $ | (0.46 | ) | | $ | 0.73 |
| | $ | (0.69 | ) |
| | | | | | | |
Net income (loss) per share attributable to Rouse Properties Inc. - Diluted | $ | (0.02 | ) | | $ | (0.46 | ) | | $ | 0.73 |
| | $ | (0.69 | ) |
|
| | |
Q3 2015 Supplemental Package | | 10 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Mortgages, Notes, and Loans Payable
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(In thousands) | Ownership % | Initial Maturity | | Extended Maturity | | | Outstanding Balance | | Balloon Payment at Maturity | | Amortization | |
| Month | Year | | Month | Year | Rate | | | 2015 | 2016 | 2017 | 2018 | 2019 | After | Mortgage Details |
Bel Air Mall | 100% | Dec | 2015 | | Dec | 2015 | 5.30 | % | | $ | 109,618 |
| | $ | 109,045 |
| | $ | 573 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| Non-recourse/fixed |
Greenville Mall | 100% | Dec | 2015 | | Dec | 2015 | 5.29 |
| | 39,995 |
| | 39,857 |
| | 138 |
| — |
| — |
| — |
| — |
| — |
| Non-recourse/fixed |
Vista Ridge Mall (1) | 100% | Apr | 2016 | | Apr | 2016 | 6.87 |
| | 66,361 |
| | 64,660 |
| | 750 |
| 951 |
| — |
| — |
| — |
| — |
| Non-recourse/fixed |
The Centre at Salisbury (2) | 100% | May | 2016 | | May | 2016 | 5.79 |
| | 115,000 |
| | 115,000 |
| | — |
| — |
| — |
| — |
| — |
| — |
| Partial recourse/fixed |
The Mall at Turtle Creek | 100% | Jun | 2016 | | Jun | 2016 | 6.54 |
| | 76,883 |
| | 76,079 |
| | 268 |
| 536 |
| — |
| — |
| — |
| — |
| Non-recourse/fixed |
NewPark Mall(3) | 100% | Sep | 2018 | | Sep | 2019 | 2.44 |
| | 114,250 |
| | 114,250 |
| | — |
| — |
| — |
| — |
| — |
| — |
| Non-recourse/floating |
West Valley Mall | 100% | Sep | 2018 | | Sep | 2023 | 3.24 |
| | 59,000 |
| | 56,790 |
| | — |
| 188 |
| 1,147 |
| 875 |
| — |
| — |
| Non-recourse/fixed |
Pierre Bossier | 100% | May | 2022 | | May | 2022 | 4.94 |
| | 46,071 |
| | 39,891 |
| | 201 |
| 818 |
| 866 |
| 911 |
| 957 |
| 2,427 |
| Non-recourse/fixed |
Pierre Bossier Anchor | 100% | May | 2022 | | May | 2022 | 4.85 |
| | 3,573 |
| | 2,894 |
| | 22 |
| 90 |
| 95 |
| 100 |
| 105 |
| 267 |
| Non-recourse/fixed |
Southland Center (MI) | 100% | Jul | 2022 | | Jul | 2022 | 5.09 |
| | 75,123 |
| | 65,085 |
| | 316 |
| 1,284 |
| 1,363 |
| 1,435 |
| 1,511 |
| 4,129 |
| Non-recourse/fixed |
Chesterfield Towne Center | 100% | Oct | 2022 | | Oct | 2022 | 4.75 |
| | 106,820 |
| | 92,380 |
| | 441 |
| 1,789 |
| 1,892 |
| 1,985 |
| 2,082 |
| 6,251 |
| Non-recourse/fixed |
Animas Valley | 100% | Nov | 2022 | | Nov | 2022 | 4.41 |
| | 49,386 |
| | 41,844 |
| | 229 |
| 931 |
| 980 |
| 1,025 |
| 1,072 |
| 3,305 |
| Non-recourse/fixed |
Lakeland Mall | 100% | Mar | 2023 | | Mar | 2023 | 4.17 |
| | 67,131 |
| | 55,951 |
| | 317 |
| 1,285 |
| 1,348 |
| 1,406 |
| 1,467 |
| 5,357 |
| Non-recourse/fixed |
Valley Hills Mall | 100% | July | 2023 | | July | 2023 | 4.47 |
| | 65,651 |
| | 54,921 |
| | 289 |
| 1,174 |
| 1,237 |
| 1,294 |
| 1,354 |
| 5,382 |
| Non-recourse/fixed |
Chula Vista Center | 100% | July | 2024 | | July | 2024 | 4.18 |
| | 70,000 |
| | 60,814 |
| | — |
| — |
| 467 |
| 1,175 |
| 1,225 |
| 6,319 |
| Non-recourse/fixed |
The Mall at Barnes Crossing | 51% | Sep | 2024 | | Sep | 2024 | 4.29 |
| | 67,000 |
| | 58,361 |
| | — |
| — |
| 268 |
| 1,093 |
| 1,142 |
| 6,136 |
| Non-recourse/fixed |
Bayshore Mall | 100% | Oct | 2024 | | Oct | 2024 | 3.96 |
| | 46,500 |
| | 40,185 |
| | — |
| — |
| 130 |
| 804 |
| 837 |
| 4,544 |
| Non-recourse/fixed |
Mt. Shasta Mall | 100% | Mar | 2025 | | Mar | 2025 | 4.19 |
| | 31,850 |
| | 27,747 |
| | — |
| — |
| — |
| 386 |
| 540 |
| 3,177 |
| Non-recourse/fixed |
Fig Garden Village | 100% | Jun | 2025 | | Jun | 2025 | 4.14 |
| | 74,200 |
| | 67,494 |
| | — |
| — |
| — |
| — |
| — |
| 6,706 |
| Non-recourse/fixed |
| | | | | | | | | | | | | | | | | | | |
Total property level debt | | | | | | | 4.69 | % | | $ | 1,284,412 |
| | $ | 1,183,248 |
| | $ | 3,544 |
| $ | 9,046 |
| $ | 9,793 |
| $ | 12,489 |
| $ | 12,292 |
| $ | 54,000 |
| |
| | | | | | | | | | | | | | | | | | | |
2013 Term Loan (1)(4)(5) | | Nov | 2018 | | Nov | 2018 | 2.29 |
| | 285,000 |
| | 285,000 |
| | — |
| — |
| — |
| — |
| — |
| — |
| Recourse/floating |
2013 Revolver (1)(4)(5)(6) | | Nov | 2017 | | Nov | 2018 | 2.30 |
| | 68,000 |
| | 68,000 |
| | — |
| — |
| — |
| — |
| — |
| — |
| Recourse/floating |
| | | | | | | | | | | | | | | | | | | |
Total corporate level debt | | | | | | | | | 353,000 |
| | 353,000 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| |
Total Debt Outstanding (7)(8) | | | | | | | 4.17 | % | | $ | 1,637,412 |
| | $ | 1,536,248 |
| | $ | 3,544 |
| $ | 9,046 |
| $ | 9,793 |
| $ | 12,489 |
| $ | 12,292 |
| $ | 54,000 |
| |
| | | | | | | | | | | | | | | | | | | |
Market rate adjustment | | | | | | | | | 18 |
| | | | | | | | | | |
Total Debt Outstanding | | | | | | | | | $ | 1,637,430 |
| | | | | | | | | | |
Less: Non controlling interest share of debt | | | | | | | | | | | | | | | | | | | |
The Mall at Barnes Crossing | 49% | Sep | 2024 | | | | 4.29 |
| | (32,830 | ) | | | | | | | | | | |
Company's Share of Consolidated Debt | | | | | | | 4.17 | % | | $ | 1,604,600 |
| | | | | | | | | | |
(1) Prepayable without a penalty.(2) In conjunction with the acquisition of The Centre at Salisbury the Company guaranteed a maximum amount of $3.5 million until certain financial covenants are met.
(3) LIBOR (90 day) plus 210 basis points. The Company entered into a forward staring swap which will fix the interest rate at 3.26% beginning January 2016, through September 2018.
(4) LIBOR (30 day) plus 210 basis points.
(5) During the nine months ended September 30, 2015, the Company exercised an "accordion" feature and increased the aggregate commitments under the 2013 Senior facility from $545.0 million to $595.0 million, increased availability of borrowings on a revolving basis from $285.0 million to $310.0 million and increased the 2013 Term Loan from $260.0 million to $285.0 million.
(6) As of September30, 2015, the Company had drawn $68.0 million on the Revolver.
|
| | |
Q3 2015 Supplemental Package | | 11 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Mortgages, Notes, and Loans Payable
(7) The following properties were included in our 2013 Senior Facility collateral pool as of September 30, 2015:
|
| | | | |
Birchwood Mall | Grand Traverse Mall | Mall St. Vincent | Silver Lake Mall | Three Rivers Mall |
Cache Valley Mall | Lansing Mall | North Plains Mall | Spring Hill Mall | Westwood Mall |
Colony Square Mall | The Mall at Sierra Vista | Sikes Senter | Southland Mall | White Mountain Mall |
Gateway Mall | | | | |
(8) Approximately 71% or $1.17 billion of the Rouse debt had a fixed interest rate and 29% or $467.3 million of the Rouse debt had a variable interest rate.
|
| | | | | | | | | | | | | | | | | | | | | |
(In thousands) | 2015 | 2016 | 2017 | 2018 | 2019 | After | Total |
Balloon payment | $ | 148,902 |
| $ | 255,739 |
| $ | 68,000 |
| $ | 456,040 |
| $ | — |
| $ | 607,567 |
| $ | 1,536,248 |
|
Amortization | 3,544 |
| 9,046 |
| 9,793 |
| 12,489 |
| 12,292 |
| 54,000 |
| 101,164 |
|
Debt maturity and amortization | $ | 152,446 |
| $ | 264,785 |
| $ | 77,793 |
| $ | 468,529 |
| $ | 12,292 |
| $ | 661,567 |
| $ | 1,637,412 |
|
Weighted average interest rate of expiring debt | 5.30 | % | 6.29 | % | 2.30 | % | 2.45 | % | — | % | 4.45 | % | 4.17 | % |
. |
| | | | | | | | | | | | | | | | |
(In thousands) | | Rouse Property-Level Debt (1) | | Term Loan | | Revolver | | Total |
Beginning balance as of January 1, 2015 | | $ | 1,313,730 |
| | $ | 260,000 |
| | $ | 10,000 |
| | $ | 1,583,730 |
|
Washington Park Payoff | | (10,474 | ) | | — |
| | — |
| | (10,474 | ) |
Mt. Shasta Mall Loan | | 31,850 |
| | — |
| | — |
| | 31,850 |
|
Fig Garden Village Loan | | 74,200 |
| | — |
| | — |
| | 74,200 |
|
Steeplegate Disposition | | (45,862 | ) | | — |
| | — |
| | (45,862 | ) |
Collin Creek Disposition | | (57,572 | ) | | — |
| | — |
| | (57,572 | ) |
Grand Traverse Payoff | | (58,982 | ) | | — |
| | — |
| | (58,982 | ) |
NewPark Mall Payoff | | (64,665 | ) | | — |
| | — |
| | (64,665 | ) |
New Park Mall Refinance | | 114,250 |
| | — |
| | — |
| | 114,250 |
|
2015 Mortgage loan amortization | | (12,063 | ) | | — |
| | — |
| | (12,063 | ) |
Accordion exercise | | — |
| | 25,000 |
| | — |
| | 25,000 |
|
Drawdowns on 2013 Revolver | | — |
| | — |
| | 195,500 |
| | 195,500 |
|
Paydowns on 2013 Revolver | | — |
| | — |
| | (137,500 | ) | | (137,500 | ) |
Ending balance as of September 30, 2015 | | $ | 1,284,412 |
| | $ | 285,000 |
| | $ | 68,000 |
| | $ | 1,637,412 |
|
| | | | | | | | |
Weighted Average Balance | | $ | 1,276,387 |
| | $ | 268,516 |
| | $ | 42,863 |
| | $ | 1,587,766 |
|
(1) Loan activity for the nine months ended September 30, 2015 excludes the impact of the repayment of The Shoppes at Knollwood Mall debt as debt was classified as a Liability of Asset Held for Sale at December 31, 2014 in the Company's Consolidated Balance Sheet and therefore, excluded from the Mortgage, Notes and Loans Payable total.
|
| | |
Q3 2015 Supplemental Package | | 12 |
Financial Schedules ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Prepaid Expenses and Other Assets, Net
|
| | | | | | | |
(In thousands) | September 30, 2015 (Unaudited) | | December 31, 2014 |
| | | |
Above-market tenant leases, net | $ | 41,849 |
| | $ | 50,996 |
|
Prepaid expenses | 6,370 |
| | 4,755 |
|
Below-market ground leases, net | 3,029 |
| | 3,145 |
|
Deposits | 528 |
| | 1,447 |
|
Other | 369 |
| | 2,347 |
|
Total prepaid expenses and other assets, net | $ | 52,145 |
| | $ | 62,690 |
|
Accounts Payable and Accrued Expenses, Net
|
| | | | | | | |
(In thousands) | September 30, 2015 (Unaudited) | | December 31, 2014 |
| | | |
Below market tenant leases, net | $ | 38,831 |
| | $ | 43,292 |
|
Construction payable | 23,201 |
| | 16,272 |
|
Accounts payable and accrued expenses | 11,672 |
| | 9,901 |
|
Accrued real estate taxes | 11,374 |
| | 9,028 |
|
Accrued dividend | 10,512 |
| | 9,885 |
|
Accrued interest | 6,586 |
| | 4,380 |
|
Accrued payroll and other employee liabilities | 6,447 |
| | 9,352 |
|
Deferred income | 4,989 |
| | 5,471 |
|
Asset retirement obligation liability | 4,532 |
| | 4,545 |
|
Tenants and other deposits | 1,649 |
| | 1,336 |
|
Other | 3,862 |
| | 514 |
|
Total accounts payable and accrued expenses, net | $ | 123,655 |
| | $ | 113,976 |
|
|
| | |
Q3 2015 Supplemental Package | | 13 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Strategic Capital Redevelopment Projects:
($ in thousands)
|
| | | | | | | | | | | | | | |
Property | | Description | | Total Project Square Feet | | Total Net Estimated Project Cost | | Cost to Date | | Estimated Stabilized Yield (1) | | Construction Start Date | | Substantial Completion Date |
Newpark Mall Newark, CA | | 140,000 SF of new entertainment space, including AMC Theater and a two level restaurant pavilion with patio seating. | | 175,000 | | $55,900(2) | | $41,999 | | 9.5 - 10.5% | | Q3 2014 | | Q4 2015 - Q1 2016 |
Gateway Mall Springfield, OR | | De-mall and construct new exterior facing junior boxes including Marshall's, Hobby Lobby, Petco and new outparcels. | | 288,000 | | $45,200 | | $29,620 | | 8 - 9% | | Q3 2014 | | Q4 2015 |
Southland Center Taylor, MI | | Demolish vacant anchor and construct new 50,000 SF Cinemark Theater and restaurant collection. | | 62,000 | | $15,300 | | $2,753 | | 9 - 10% | | Q2 2015 | | Q1 2016 |
Southland Mall Hayward, CA | | Redevelop former Kohl's anchor for new Dick's Sporting Goods, convert inline space to new Cinemark Theater, junior boxes and full service and fast casual restaurants. | | 243,000 | | $44,400 | | $5,341 | | 9 - 10% | | Q3 2015 | | Q4 2016 |
Spring Hill Mall West Dundee, IL | | Replace former jcpenney anchor and inline space with new 37,000 SF Cinemark Theater, street scape, multi-tenant buildings and restaurant collection. | | 93,000 | | $19,716(3) | | $3,945 | | 8 - 9% | | Q3 2015 | | Q4 2016 |
(1) Estimated stabilized yield based on total net estimated project cost.
(2) After deducting the benefit of the net present value of municipal incentive currently estimated at $9.6 million.
(3) After deducting the benefit of the net present value of municipal incentive currently estimated at $5.9 million.
Total Portfolio Capital Expenditures:
|
| | | | |
| | Three Months Ended |
(In thousands) | | September 30, 2015 |
Ordinary capital expenditures (1) | | $ | 635 |
|
Cosmetic capital expenditures | | 2,214 |
|
Tenant improvements and allowances (2) | | 6,601 |
|
Total | | $ | 9,450 |
|
(1) Includes non-tenant recurring and non-recurring capital expenditures.
(2) Includes tenant improvements and allowances on current operating properties, excluding anchors and strategic projects.
|
| | |
Q3 2015 Supplemental Package | | 14 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Key Operating Performance Indicators
As of September 30, 2015
|
| | | | | | | | | | |
GLA Summary (1) |
| | Number of Properties | | Mall and Freestanding GLA | | Anchor GLA (Rouse Owned) | | Anchor GLA (Tenant Owned) | | Total Area |
| | | | (GLA in thousands) |
Total Rouse Properties Portfolio | | 35 | | 11,288 | | 5,989 | | 6,773 | | 24,083 |
| | | | | | | | | | |
|
| | | | |
Operating Metrics (1) |
| | | | |
| | Tenant Sales (2) | | Occupancy Cost (3) |
Total Operating Portfolio | | $345 | | 11.1% |
|
| | | |
| Operating Property Portfolio |
| In-Place Rent < 10k SF (4) |
| September 30, 2015 | | September 30, 2014 |
Freestanding | $20.62 | | $19.58 |
Mall | 41.11 | | 39.49 |
Total Operating Property portfolio | $38.55 | | $37.18 |
(1) See Property Schedule on page 16 for individual details.
(2) Trailing twelve month tenant sales for mall and freestanding stores less than 10,000 square feet for those tenants reporting.
(3) Represents mall and freestanding tenants less than 10,000 square feet utilizing comparative tenant sales.
(4) Weighted average rent of mall and freestanding stores as of September 30, 2015 and 2014. Rent is presented on a cash basis and consists of base minimum rent,
common area costs, and real estate taxes.
|
| | |
Q3 2015 Supplemental Package | | 15 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Summary of Properties (1)
As of September 30, 2015 |
| | | | | | | | | | | | | | | | |
Property Name | Location | Anchors / Major Tenants | Mall and Freestanding GLA | Office GLA | Anchor GLA (Rouse Owned) | Anchor GLA (Tenant Owned) | Total GLA | % Leased | % Occupied |
Animas Valley Mall | Farmington, NM | Dillard's, jcpenney, Sears | 277,983 |
| — |
| 188,817 |
| — |
| 466,800 |
| 92.6 | % | 89.1 | % |
Barnes Crossing, The Mall at | Tupelo, MS | Belk Home, jcpenney, Sears, Belk | 383,769 |
| — |
| 250,965 |
| 100,954 |
| 735,688 |
| 97.1 |
| 92.6 |
|
Bayshore Mall | Eureka, CA | Sears, Wal Mart, Kohl's | 350,676 |
| — |
| 161,209 |
| 59,235 |
| 571,120 |
| 90.0 |
| 81.1 |
|
Bel Air Mall | Mobile, AL | Belk, jcpenney, Dillard's, Target | 419,375 |
| — |
| 558,023 |
| 333,990 |
| 1,311,388 |
| 97.0 |
| 92.0 |
|
Birchwood Mall | Port Huron, MI | Target, Carson's, Macy's, Sears, jcpenney | 302,880 |
| — |
| 161,216 |
| 264,918 |
| 729,014 |
| 90.5 |
| 90.5 |
|
Cache Valley Mall | Logan, UT | Herberger's, jcpenney | 273,817 |
| — |
| 109,476 |
| — |
| 383,293 |
| 94.8 |
| 86.2 |
|
Chesterfield Towne Center | Richmond, VA | Garden Ridge, jcpenney, Macy's, Sears | 484,931 |
| — |
| 543,572 |
| — |
| 1,028,503 |
| 92.3 |
| 85.4 |
|
Chula Vista Center | Chula Vista, CA | Macy's, Burlington Coat, jcpenney, Sears, AMC | 320,138 |
| — |
| 163,232 |
| 377,600 |
| 860,970 |
| 95.2 |
| 94.2 |
|
Colony Square Mall | Zanesville, OH | Elder-Beerman, jcpenney, Dunham's Sports, Cinemark | 352,291 |
| — |
| 78,440 |
| 58,997 |
| 489,728 |
| 79.6 |
| 76.7 |
|
Fig Garden Village | Fresno, CA | Whole Foods, CVS | 267,740 |
| 33,181 |
| — |
| — |
| 300,921 |
| 93.8 |
| 93.8 |
|
Grand Traverse Mall | Traverse City, MI | jcpenney, Macy's, Target | 307,884 |
| — |
| — |
| 283,349 |
| 591,233 |
| 88.7 |
| 87.1 |
|
Greenville Mall | Greenville, NC | jcpenney, Belk Ladies, Dunham's Sports, Belk | 228,565 |
| — |
| 178,510 |
| 46,051 |
| 453,126 |
| 93.6 |
| 92.7 |
|
Lakeland Square | Lakeland, FL | jcpenney, Dillard's, Sears, Macy's, Burlington Coat, Cinemark, Sports Authority | 351,171 |
| — |
| 276,358 |
| 257,353 |
| 884,882 |
| 97.0 |
| 89.0 |
|
Lansing Mall | Lansing, MI | jcpenney, Younkers, Macy's, Regal Cinema | 477,986 |
| — |
| 210,900 |
| 103,000 |
| 791,886 |
| 93.3 |
| 89.5 |
|
Mall St. Vincent | Shreveport-Bossier City, LA | Dillard's, Sears | 193,967 |
| — |
| — |
| 348,000 |
| 541,967 |
| 85.9 |
| 82.1 |
|
Mt. Shasta | Redding, CA | jcpenney, Macy's, Sears | 188,558 |
| — |
| 130,444 |
| 202,594 |
| 521,596 |
| 96.7 |
| 87.5 |
|
North Plains Mall | Clovis, NM | Dillard's, jcpenney, Sears, Beall's | 132,527 |
| — |
| 170,496 |
| — |
| 303,023 |
| 92.8 |
| 91.9 |
|
Pierre Bossier Mall | Bossier City, LA | Virginia College, jcpenney, Sears, Dillard's | 265,365 |
| — |
| 59,156 |
| 288,328 |
| 612,849 |
| 84.2 |
| 84.3 |
|
Salisbury, The Centre at | Salisbury, MD | Boscov's, jcpenney, Sears, Macy's, Dick's, Regal Cinema | 366,279 |
| — |
| 357,416 |
| 140,000 |
| 863,695 |
| 95.9 |
| 95.0 |
|
Sierra Vista, The Mall at | Sierra Vista, AZ | Dillard's, Sears, Cinemark | 170,185 |
| — |
| — |
| 196,492 |
| 366,677 |
| 95.1 |
| 95.1 |
|
Sikes Senter | Wichita Falls, TX | Dillard's, jcpenney, At Home, Dillard's Men's and Home | 293,031 |
| — |
| 374,690 |
| — |
| 667,721 |
| 88.5 |
| 85.6 |
|
Silver Lake Mall | Coeur D' Alene, ID | jcpenney, Macy's, Sears, Sports Authority | 155,650 |
| — |
| 172,253 |
| — |
| 327,903 |
| 88.0 |
| 86.3 |
|
Southland Center | Taylor, MI | jcpenney, Macy's, Cinemark | 370,605 |
| — |
| 215,787 |
| 292,377 |
| 878,769 |
| 97.5 |
| 88.9 |
|
Southland Mall | Hayward, CA | jcpenney, Kohl's, Macy's, Sears | 573,437 |
| — |
| 445,896 |
| 292,000 |
| 1,311,333 |
| 90.3 |
| 87.2 |
|
Three Rivers Mall | Kelso, WA | jcpenney, Macy's, Sportsman's Warehouse | 307,563 |
| — |
| 98,566 |
| — |
| 406,129 |
| 82.6 |
| 81.9 |
|
Turtle Creek, The Mall at | Jonesboro, AR | Dillard's, jcpenney, Target | 367,095 |
| — |
| — |
| 364,199 |
| 731,294 |
| 94.6 |
| 89.6 |
|
Valley Hills Mall | Hickory, NC | Belk, Dillard's, jcpenney, Sears | 315,577 |
| — |
| — |
| 611,516 |
| 927,093 |
| 92.2 |
| 83.1 |
|
Washington Park Mall | Bartlesville, OK | jcpenney, Sears, Dillard's | 161,864 |
| — |
| 122,894 |
| 71,402 |
| 356,160 |
| 94.3 |
| 94.3 |
|
West Valley Mall | Tracy, CA | jcpenney, Macy's, Sears, Target, Cinemark | 534,463 |
| — |
| 236,454 |
| 111,836 |
| 882,753 |
| 96.6 |
| 96.2 |
|
Westwood Mall | Jackson, MI | Younkers, Wal-Mart, jcpenney | 143,943 |
| — |
| 70,500 |
| 301,188 |
| 515,631 |
| 90.9 |
| 89.5 |
|
White Mountain Mall | Rock Springs, WY | Herberger's, jcpenney | 243,040 |
| — |
| 94,482 |
| — |
| 337,522 |
| 93.3 |
| 93.3 |
|
Total Operating Portfolio | | 9,582,355 |
| 33,181 |
| 5,429,752 |
| 5,105,379 |
| 20,150,667 |
| 92.3 | % | 88.7 | % |
Gateway Mall | Springfield, OR | Kohl's, Sears, Target, Cabella's, Walmart, Cinema 6 | 428,718 |
| — |
| 218,055 |
| 113,613 |
| 760,386 |
| 98.3 |
| 99.1 |
|
Newpark Mall | Newark, CA | Macys, jcpenney, Sears, Burlington Coat, AMC | 468,618 |
| — |
| 207,372 |
| 335,870 |
| 1,011,860 |
| 86.0 |
| 63.9 |
|
Spring Hill Mall | West Dundee, IL | Kohl's, Carson Pirie Scott, Sears, Macy's, Regal Cinema | 417,270 |
| — |
| 134,148 |
| 547,432 |
| 1,098,850 |
| 83.5 |
| 72.0 |
|
Vista Ridge Mall | Lewisville, TX | Dillard's, jcpenney, Macy's, Sears, Cinemark | 390,578 |
| — |
| — |
| 670,210 |
| 1,060,788 |
| 82.0 |
| 82.0 |
|
Redevelopment and special consideration assets | | 1,705,184 |
| — |
| 559,575 |
| 1,667,125 |
| 3,931,884 |
| 87.6 | % | 78.1 | % |
Total Rouse Portfolio | | | 11,287,539 |
| 33,181 |
| 5,989,327 |
| 6,772,504 |
| 24,082,551 |
| 91.6 | % | 87.3 | % |
(1) All properties are 100% owned by Rouse Properties Inc., and subsidiaries with the exception of The Mall at Barnes Crossing of which Rouse owns a 51% interest.
|
| | |
Q3 2015 Supplemental Package | | 16 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Lease Expiration Schedule (1)
As of September 30, 2015
|
| | | | | | | | | | | | |
Year | | Number of Expiring Leases | | Expiring GLA | | Expiring Rates ($ psf) (2) | | Percent of Total Gross Rent |
Specialty Leasing (3) | | 476 | | 1,125,285 |
| | $ | 13.06 |
| | |
Permanent Leasing | | | | | | | | |
2014 and Prior | | 10 | | 28,442 |
| | 49.42 |
| | 0.5 | % |
2015 | | 70 | | 136,817 |
| | 45.68 |
| | 2.3 | % |
2016 | | 382 | | 1,155,299 |
| | 33.19 |
| | 13.9 | % |
2017 | | 367 | | 1,245,018 |
| | 32.79 |
| | 14.8 | % |
2018 | | 238 | | 1,020,216 |
| | 35.14 |
| | 13.0 | % |
2019 | | 142 | | 698,396 |
| | 32.20 |
| | 8.1 | % |
2020 | | 135 | | 594,016 |
| | 28.25 |
| | 6.1 | % |
2021 | | 103 | | 728,443 |
| | 23.95 |
| | 6.3 | % |
2022 | | 90 | | 442,519 |
| | 32.20 |
| | 5.1 | % |
2023 | | 84 | | 410,141 |
| | 32.32 |
| | 4.8 | % |
2024 | | 94 | | 683,086 |
| | 22.92 |
| | 5.7 | % |
2025 | | 120 | | 954,893 |
| | 26.80 |
| | 9.2 | % |
2026 and thereafter | | 74 | | 1,115,619 |
| | 25.66 |
| | 10.2 | % |
Total Permanent Leasing | | 1,909 | | 9,212,905 |
| | $ | 30.09 |
| | 100 | % |
Total Leasing | | 2,385 | | 10,338,190 |
| | | | |
(1) Represents contractual obligations for space in regional malls and excludes traditional anchor stores.
(2) Excluded from the Expiring Rate are freestanding spaces, kiosks and leases paying percent rent in lieu of base minimum rent.
(3) Includes Specialty Leasing license agreements with terms in excess of 12 months.
|
| | |
Q3 2015 Supplemental Package | | 17 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Top Ten Tenants
As of September 30, 2015
|
| | | | | | | | | | |
| | | | | | | | Locations |
Retail Portfolio | | Primary DBA | | Percent of Minimum Rent, Tenant Recoveries and Other (1) | | Square Footage (000's) | | Total | | Rouse Owned |
L Brands, Inc. | | Bath & Body Works, Victoria's Secret, White Barn Candle Co. | | 4.5% | | 263 | | 64 | | 64 |
Foot Locker, Inc. | | Champs Sports, Footaction USA, Footlocker, Kids Foot Locker, Lady Footlocker | | 3.5 | | 230 | | 56 | | 56 |
Signet Jewelers, Ltd. | | Belden Jewelers, JB Robinson Jewelers, Kay Jewelers, Osterman Jewelers, Weisfields Jewelers, Zales, Gordon's, Piercing Pagoda | | 3.5 | | 86 | | 67 | | 67 |
jcpenney Company, Inc. | | jcpenney | | 2.6 | | 2,644 | | 28 | | 18(2) |
Sears Holdings Corporation | | Sears | | 2.2 | | 3,157 | | 24 | | 13 |
Cinemark USA, Inc. | | Cinemark Movies | | 2.1 | | 356 | | 8 | | 8 |
American Eagle Outfitters, Inc. | | Aerie, American Eagle Outfitters | | 1.9 | | 104 | | 18 | | 18 |
Genesco Inc. | | Hat Shack, Hat World, Journey's, Lids, Lids Locker Room, Underground Station | | 1.8 | | 77 | | 54 | | 54 |
Macy's Inc. | | Macy's | | 1.7 | | 2,093 | | 16 | | 5 |
Ascena Retail Group, Inc. | | Ann Taylor Loft, Dressbarn, Justice, Limited Too, Maurices, Lane Bryant | | 1.7 | | 211 | | 42 | | 42 |
Totals | | | | 25.5% | | 9,221 | | 377 | | 345 |
(1) Represents the trailing twelve months of minimum rent, tenant recoveries and other.
(2) Does not include three locations in which Rouse owns the land which is ground leased to jcpenney.
|
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Q3 2015 Supplemental Package | | 18 |
Portfolio Operating Metrics ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
Leasing Activity
As of September 30, 2015
|
| | | | | | | | | | | |
| TOTAL LEASING ACTIVITY (1) | | |
New Leases | Number of Leases | Square Feet | Term | | Initial Inline Rent PSF (2) | | Initial Freestanding Rent PSF | | Average Inline Rent PSF (3) | | Average Freestanding Rent PSF |
Under 10,000 sq. ft. | 35 | 127,396 | 8.4 | | $35.31 | | $48.31 | | $38.88 | | $52.86 |
Over 10,000 sq. ft. | 8 | 146,237 | 9.6 | | 12.05 | | — | | 12.98 | | — |
Total New Leases | 43 | 273,633 | 9.1 | | 22.63 | | 48.31 | | 24.77 | | 52.86 |
| | | | | | | | | | | |
Renewal Leases | | | | | | | | | | | |
Under 10,000 sq. ft. | 44 | 142,848 | 3.5 | | $29.14 | | $36.93 | | $29.94 | | $38.61 |
Over 10,000 sq. ft. | 3 | 65,343 | 4.2 | | 9.27 | | — | | 9.33 | | — |
Total Renewal Leases | 47 | 208,191 | 3.7 | | 22.16 | | 36.93 | | 22.70 | | 38.61 |
| | | | | | | | | | | |
Sub-Total | 90 | 481,824 | 6.8 | | 22.44 | | 39.11 | | 23.92 | | 41.34 |
| | | | | | | | | | | |
Percent in Lieu | 13 | 50,068 | n.a. | | n.a. | | n.a | | n.a. | | n.a |
| | | | | | | | | | | |
Total Q3 2015 | 103 | 531,892 | 6.8 | | $22.44 | | $39.11 | | $23.92 | | $41.34 |
Total Q2 2015 | 100 | 605,817 | | | | | | | | | |
Total Q1 2015 | 115 | 456,779 | | | | | | | | | |
Total 2015 | 318 | 1,594,488 | | | | | | | | | |
|
| | | | | | | | | | | | | |
| SUITE TO SUITE - NEW & RENEWAL LEASE SPREAD (4) |
| | | | | | | | | Initial Rent Spread | | Average Rent Spread |
| Number of Leases | Square Feet | Term | Initial Rent PSF (2) | Average Rent PSF (3) | | Expiring Rent PSF (5) | | $ | % | | $ | % |
Three Months Ended September 30, 2015 | 59 | 238,597 | 5.0 | $26.13 | $27.55 | | $23.08 | | $3.05 | 13.2% | | $4.47 | 19.4% |
(1) Excluding anchors and specialty leasing.
(2) Represents initial rent at time of rent commencement consisting of base minimum rent, common area costs, and real estate taxes.
(3) Represents average rent over the lease term consisting of base minimum rent, common area costs, and real estate taxes.
(4) Excluding anchors, percent in lieu, and specialty leasing.
(5) Represents expiring rent at end of lease consisting of base minimum rent, common area costs, and real estate taxes.
|
| | |
Q3 2015 Supplemental Package | | 19 |
Glossary of Terms ![](http://www.sec.gov/Archives/edgar/data/1528558/000162828015008128/copyofrouselogoa02a04.jpg)
|
| |
Anchor/Traditional Anchor | Department stores and discount department stores in traditional anchor spaces whose merchandise appeals to a broad range of shoppers or spaces which are greater than 70,000 square feet. |
Average Rent | Represents average rent over the term consisting of base minimum rent, common area costs, and real estate taxes. |
Average Rent Spread | Dollar spread between Average Rent and Expiring Rent. |
Expiring Rent | Represents rent at the end of the lease consisting of base minimum rent, common area costs, and real estate taxes. |
Freestanding | Outparcel retail locations (locations that are not attached to the primary complex of buildings that comprise a shopping center). Excludes anchor stores. |
Gross Leasable Area (GLA) | Total gross leasable space at 100%. |
In-Place Rent | Weighted average rental rate of mall stores as of a point in time. Rent is presented on a cash basis and consists of base minimum rent, common area costs, and real estate taxes. |
Initial Rent | Represents initial rent at the beginning of the term consisting of base minimum rent, common area costs, and real estate taxes. |
Initial Rent Spread | Dollar spread between Initial Rent and Expiring Rent. |
Leased Area | Leased area represents the sum of: (1) tenant occupied space lease and (2) all leases signed for currently vacant space and (3) tenants no longer occupying space, but still paying rent for all inline mall shop and freestanding retail locations, excluding anchors (Leased Area). Leased percentage is the Leased Area over the mall and Freestanding Area. |
Mall | All mall shop locations excluding anchor and freestanding stores. |
Occupancy Cost | Ratio of total tenant charges (rent and reimbursement of common area charges, real estate tax and insurance) to comparative sales for tenants less than 10,000 square feet. |
Occupied Area | Occupied area represents the sum of: (1) tenant occupied space under lease and (2) tenants no longer occupying space, but still paying rent for all inline mall shop and freestanding retail locations, excluding anchors (Occupied Area). Occupied percentage is the Occupied Area over the Mall and Freestanding Area. |
Operating Portfolio | Portfolio excluding properties undergoing substantial redevelopment and special consideration properties. |
Specialty Leasing | Temporary tenants typically on license agreements with terms in excess of twelve months and are generally cancellable by the Company with notice ranging from 30-90 days. |
Tenant Sales | Rolling twelve month sales for mall and freestanding stores less than 10,000 square feet for those tenants reporting. |
|
| | |
Q3 2015 Supplemental Package | | 20 |
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