Retail Properties of America, Inc. Reports Second Quarter And Year To Date Results

OAK BROOK, Ill., Aug. 1, 2017 /PRNewswire/ -- Retail Properties of America, Inc. (NYSE: RPAI) (the "Company") today reported financial and operating results for the quarter and six months ended June 30, 2017.

FINANCIAL RESULTS
For the quarter ended June 30, 2017, the Company reported:

  • Net income attributable to common shareholders of $112.4 million, or $0.48 per share, compared to $26.2 million, or $0.11 per share, for the same period in 2016;
  • Funds from operations (FFO) attributable to common shareholders of $60.7 million, or $0.26 per share, compared to $73.9 million, or $0.31 per share, for the same period in 2016; and
  • Operating funds from operations (Operating FFO) attributable to common shareholders of $62.9 million, or $0.27 per share, compared to $66.7 million, or $0.28 per share, for the same period in 2016.

For the six months ended June 30, 2017, the Company reported:

  • Net income attributable to common shareholders of $100.9 million, or $0.43 per share, compared to $71.3 million, or $0.30 per share, for the same period in 2016;
  • FFO attributable to common shareholders of $61.2 million, or $0.26 per share, compared to $150.3 million, or $0.64 per share, for the same period in 2016; and
  • Operating FFO attributable to common shareholders of $129.8 million, or $0.55 per share, compared to $132.5 million, or $0.56 per share, for the same period in 2016.

OPERATING RESULTS
For the quarter ended June 30, 2017, the Company's portfolio results were as follows:

  • 1.8% increase in same store net operating income (NOI) over the comparable period in 2016;
  • Total same store portfolio percent leased, including leases signed but not commenced: 94.8% at June 30, 2017, down 50 basis points from 95.3% at March 31, 2017 and down 90 basis points from 95.7% at June 30, 2016;
  • Retail portfolio percent leased, including leases signed but not commenced: 93.7% at June 30, 2017, down 60 basis points from 94.3% at March 31, 2017 and down 120 basis points from 94.9% at June 30, 2016
  • Retail portfolio annualized base rent (ABR) per occupied square foot of $18.00 at June 30, 2017, up 7.0% from $16.82 ABR per occupied square foot at June 30, 2016;
  • 797,000 square feet of retail leasing transactions comprised of 140 new and renewal leases; and
  • Positive comparable cash leasing spreads of 28.4% on new leases and 5.6% on renewal leases for a blended spread of 8.1%. Excluding the impact from one lease within the Company's non-target portfolio, blended comparable cash leasing spreads were 9.7% and comparable renewal cash leasing spreads were 7.2%.

For the six months ended June 30, 2017, the Company's portfolio results were as follows:

  • 1.9% increase in same store NOI over the comparable period in 2016;
  • 1,263,000 square feet of retail leasing transactions comprised of 261 new and renewal leases; and
  • Positive comparable cash leasing spreads of 25.6% on new leases and 6.9% on renewal leases for a blended spread of 8.9%. Excluding the impact from one lease within the Company's non-target portfolio, blended comparable cash leasing spreads were 9.8% and comparable renewal cash leasing spreads were 7.8%.

"Our strong leasing and transactional performance continues to counteract the current retail narrative," stated Steve Grimes, president and chief executive officer. "With nearly two-thirds of our targeted retail dispositions closed, we remain focused on completing our 2017 strategic initiatives."  

INVESTMENT ACTIVITY
Dispositions
Year to date, the Company has completed, is under contract or has letters of intent (LOIs) for dispositions totaling $842.9 million. During the quarter, the Company completed $308.8 million of dispositions, which included the sales of 14 non-target multi-tenant retail assets for $287.2 million and three single-user retail assets for $21.6 million. Subsequent to quarter end, the Company completed the sales of three non-target multi-tenant retail assets, two of which were classified as held for sale as of June 30, 2017, for $74.3 million. Year to date, the Company has completed dispositions totaling $489.1 million.

The Company is under contract to sell seven non-target multi-tenant retail assets for $122.3 million and one single-user retail asset for $8.0 million. In addition, the Company has LOIs to sell $223.5 million of dispositions, which includes 11 non-target multi-tenant retail assets for $221.0 million and one single-user retail asset for $2.5 million. These transactions are expected to close during the second half of 2017, subject to satisfaction of customary closing conditions and, for those transactions subject to an LOI, negotiations of definitive agreements consistent with the LOIs.

Acquisitions 
Year to date, the Company has completed or is under contract for $147.6 million of acquisitions. During the quarter, the Company acquired two additional phases at One Loudoun Downtown, located in the Washington, D.C. metropolitan statistical area (MSA), for a gross purchase price of $5.7 million.

Subsequent to quarter end, the Company completed the acquisition of New Hyde Park Shopping Center, located in the New York MSA, for a gross purchase price of $22.1 million. New Hyde Park Shopping Center is a 32,000 square foot neighborhood shopping center that is 96.4% leased to an impressive mix of national retailers and service-oriented tenants. The property is situated in a densely populated and highly affluent submarket that boasts a strong demographic profile with population of over 202,000 and average household income of $138,000 within a three-mile radius.

The Company remains under contract for the remaining phases at One Loudoun Downtown, representing an aggregate gross purchase price of up to $25.7 million. These transactions are expected to close, subject to satisfaction of customary closing conditions, during the third quarter of 2017 as the seller completes construction on stand-alone buildings at the property.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of June 30, 2017, the Company had approximately $1.9 billion of consolidated indebtedness, which resulted in a net debt to adjusted EBITDA ratio of 5.2x, or a net debt and preferred stock to adjusted EBITDA ratio of 5.6x. Consolidated indebtedness had a weighted average contractual interest rate of 3.64% and a weighted average maturity of 5.3 years.

During the quarter, the Company repaid $16.8 million of mortgage debt, excluding amortization, with an interest rate of 4.82% and incurred a prepayment penalty of $2.3 million. In addition, the Company repurchased 6.0 million shares of common stock under its stock repurchase program at an average price per share of $12.55 for a total of approximately $75.7 million.

GUIDANCE
The Company expects to generate net income attributable to common shareholders of $0.95 to $1.00 per share in 2017. The Company is maintaining its 2017 Operating FFO attributable to common shareholders guidance range of $1.00 to $1.05 per share, based, in part, on the following assumptions:

  • Maintained 2017 same store NOI growth range of 1.25% to 2.25%;
  • Revised 2017 acquisitions range of $375 to $475 million to include repurchases of common stock;
  • Maintained 2017 dispositions range of $800 to $900 million, including the sale of Schaumburg Towers; and
  • Maintained 2017 general and administrative expenses range of $42 to $44 million.

DIVIDEND
On July 25, 2017, the Company declared the third quarter 2017 Series A preferred stock cash dividend of $0.4375 per preferred share, for the period beginning July 1, 2017, which will be paid on October 2, 2017 to preferred shareholders of record on September 21, 2017.

On July 25, 2017, the Company also declared the third quarter 2017 quarterly cash dividend of $0.165625 per share on its outstanding Class A common stock, which will be paid on October 10, 2017 to Class A common shareholders of record on September 26, 2017.

WEBCAST AND CONFERENCE CALL INFORMATION
The Company's management team will hold a webcast on Wednesday, August 2, 2017 at 11:00 AM (ET), to discuss its quarterly financial results and operating performance, as well as business highlights and outlook. In addition, the Company may discuss business and financial developments and trends and other matters affecting the Company, some of which may not have been previously disclosed.

A live webcast will be available online on the Company's website at www.rpai.com in the INVEST section. A replay of the webcast will be available. To listen to the replay, please go to www.rpai.com in the INVEST section of the website and follow the instructions.

The conference call can be accessed by dialing (877) 705-6003 or (201) 493-6725 for international participants. Please dial in at least ten minutes prior to the start of the call to register. A replay of the call will be available from 2:00 PM (ET) on August 2, 2017 until midnight (ET) on August 16, 2017. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering pin number 13662949.

SUPPLEMENTAL INFORMATION
The Company has posted supplemental financial and operating information and other data in the INVEST section of its website.

ABOUT RPAI
Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located shopping centers in the United States. As of June 30, 2017, the Company owned 132 retail operating properties representing 23.3 million square feet. The Company is publicly traded on the New York Stock Exchange under the ticker symbol RPAI. Additional information about the Company is available at www.rpai.com.

SAFE HARBOR LANGUAGE
The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as "believes", "expects", "may", "should", "intends", "plans", "estimates", "continue" or "anticipates" and variations of such words or similar expressions or the negative of such words, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company's current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company's operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic, business and financial conditions, and changes in the Company's industry and changes in the real estate markets in particular, rental rates and/or vacancy rates, frequency and magnitude of defaults on, early terminations of or non-renewal of leases by tenants, bankruptcy or insolvency of a major tenant or a significant number of smaller tenants, interest rates or operating costs, real estate valuations, the availability, terms and deployment of capital, general volatility of the capital and credit markets and the market price of the Company's Class A common stock, risks generally associated with real estate acquisitions and dispositions, including the Company's ability to identify and pursue acquisition and disposition opportunities, risks generally associated with redevelopment, including the impact of construction delays and cost overruns, the Company's ability to lease redeveloped space and the Company's ability to identify and pursue redevelopment opportunities, competitive and cost factors, the Company's ability to enter into new leases or renew leases on favorable terms, the Company's ability to create long-term shareholder value, satisfaction of closing conditions to the pending transactions described herein, the Company's failure to successfully execute its non-target disposition program and capital recycling efforts, regulatory changes and other risk factors, including those detailed in the sections of the Company's most recent Forms 10-K and 10-Q filed with the SEC titled "Risk Factors". The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

NON-GAAP FINANCIAL MEASURES
As defined by the National Association of Real Estate Investment Trusts (NAREIT), an industry trade group, Funds From Operations (FFO) means net income (loss) computed in accordance with generally accepted accounting principles (GAAP), excluding gains (or losses) from sales of depreciable real estate, plus depreciation and amortization and impairment charges on depreciable real estate. The Company has adopted the NAREIT definition in its computation of FFO attributable to common shareholders. The Company believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing its performance and operations to those of other real estate investment trusts (REITs). The Company believes that FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. FFO attributable to common shareholders does not represent an alternative to (i) "Net income" or "Net income attributable to common shareholders" as an indicator of the Company's financial performance, or (ii) "Cash flows from operating activities" in accordance with GAAP as a measure of the Company's capacity to fund cash needs, including the payment of dividends.

The Company also reports Operating FFO attributable to common shareholders, which is defined as FFO attributable to common shareholders excluding the impact of discrete non-operating transactions and other events which the Company does not consider representative of the comparable operating results of its real estate operating portfolio, which is its core business platform. Specific examples of discrete non-operating transactions and other events include, but are not limited to, the financial statement impact of gains or losses associated with the early extinguishment of debt or other liabilities, impairment charges to write down the carrying value of assets other than depreciable real estate, actual or anticipated settlement of litigation involving the Company, including associated legal costs, and executive and realignment separation charges, which are otherwise excluded from the Company's calculation of FFO attributable to common shareholders. The Company believes that Operating FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. Operating FFO attributable to common shareholders does not represent an alternative to (i) "Net income" or "Net income attributable to common shareholders" as an indicator of the Company's financial performance, or (ii) "Cash flows from operating activities" in accordance with GAAP as a measure of the Company's capacity to fund cash needs, including the payment of dividends. Comparison of the Company's presentation of Operating FFO attributable to common shareholders to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

The Company also reports Net Operating Income (NOI), which it defines as all revenues other than straight-line rental income, amortization of lease inducements, amortization of acquired above and below market lease intangibles and lease termination fee income, less real estate taxes and all operating expenses other than straight-line ground rent expense and amortization of acquired ground lease intangibles, which are non-cash items. NOI consists of Same Store NOI and NOI from Other Investment Properties. Same Store NOI for the three and six months ended June 30, 2017 represents NOI from the Company's same store portfolio consisting of 123 retail operating properties acquired or placed in service and stabilized prior to January 1, 2016. NOI from Other Investment Properties for the three and six months ended June 30, 2017 represents NOI primarily from properties acquired during 2016 and 2017, the Company's one remaining office property, three properties where the Company has begun redevelopment and/or activities in anticipation of future redevelopment, the properties that were sold or held for sale in 2016 and 2017, the net income from the Company's wholly-owned captive insurance company and the historical ground rent expense related to an existing same store investment property that was subject to a ground lease with a third party prior to the Company's acquisition of the fee interest on April 29, 2016. The Company believes that NOI, Same Store NOI and NOI from Other Investment Properties, which are supplemental non-GAAP financial measures, provide an additional and useful operating perspective not immediately apparent from "Operating income" or "Net income attributable to common shareholders" in accordance with GAAP. The Company uses these measures to evaluate its performance on a property-by-property basis because they allow management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company's operating results. NOI, Same Store NOI and NOI from Other Investment Properties do not represent alternatives to "Net income" or "Net income attributable to common shareholders" in accordance with GAAP as indicators of the Company's financial performance. Comparison of the Company's presentation of NOI, Same Store NOI and NOI from Other Investment Properties to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Adjusted EBITDA is a supplemental non-GAAP financial measure and represents net income attributable to common shareholders before interest, income taxes, depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing performance. The Company believes that Adjusted EBITDA is useful because it allows investors and management to evaluate and compare the Company's performance from period to period in a meaningful and consistent manner in addition to standard financial measurements under GAAP. Adjusted EBITDA should not be considered an alternative to "Net income attributable to common shareholders" as an indicator of the Company's financial performance. Comparison of the Company's presentation of Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Net Debt to Adjusted EBITDA is a supplemental non-GAAP financial measure and represents (i) the Company's total notional debt, excluding unamortized premium, discount and capitalized loan fees, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges (1031 Exchanges) divided by (ii) Adjusted EBITDA for the prior three months, annualized. The Company believes that this ratio is useful because it provides investors with information regarding its total notional debt net of cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges, which could be used to repay debt, compared to its performance as measured using Adjusted EBITDA. Comparison of the Company's presentation of Net Debt to Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Net Debt and Preferred Stock to Adjusted EBITDA is a supplemental non-GAAP financial measure and represents (i) the Company's total notional debt, excluding unamortized premium, discount and capitalized loan fees, plus preferred stock, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges divided by (ii) Adjusted EBITDA for the prior three months, annualized. The Company believes that this ratio is useful because it provides investors with information regarding its total notional debt and preferred stock, net of cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges, which could be used to repay debt, compared to its performance as measured using Adjusted EBITDA. Comparison of the Company's presentation of Net Debt and Preferred Stock to Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Contact Information
Michael Fitzmaurice
VP – Capital Markets & Investor Relations
Retail Properties of America, Inc.
(630) 634-4233

Retail Properties of America, Inc.

Condensed Consolidated Balance Sheets

(amounts in thousands, except par value amounts)

(unaudited)

 
   

June 30,
2017

 

December 31,
2016

Assets

       

Investment properties:

       

Land

 

$

1,141,172

   

$

1,191,403

 

Building and other improvements

 

4,023,200

   

4,284,664

 

Developments in progress

 

28,254

   

23,439

 
   

5,192,626

   

5,499,506

 

Less accumulated depreciation

 

(1,363,604)

   

(1,443,333)

 

Net investment properties

 

3,829,022

   

4,056,173

 
         

Cash and cash equivalents

 

28,003

   

53,119

 

Accounts and notes receivable (net of allowances of $6,938 and $6,886, respectively)

 

71,588

   

78,941

 

Acquired lease intangible assets, net

 

131,092

   

142,015

 

Assets associated with investment properties held for sale

 

44,087

   

30,827

 

Other assets, net

 

160,531

   

91,898

 

Total assets

 

$

4,264,323

   

$

4,452,973

 
         

Liabilities and Equity

       

Liabilities:

       

Mortgages payable, net (includes unamortized premium of $1,223 and $1,437, respectively, unamortized discount of $(601) and $(622), respectively, and unamortized capitalized loan fees of $(772) and $(5,026), respectively)

 

$

355,239

   

$

769,184

 

Unsecured notes payable, net (includes unamortized discount of $(912) and $(971), respectively, and unamortized capitalized loan fees of $(3,647) and $(3,886), respectively)

 

695,441

   

695,143

 

Unsecured term loans, net (includes unamortized capitalized loan fees of $(3,446) and $(2,402), respectively)

 

646,554

   

447,598

 

Unsecured revolving line of credit

 

182,000

   

86,000

 

Accounts payable and accrued expenses

 

65,093

   

83,085

 

Distributions payable

 

38,318

   

39,222

 

Acquired lease intangible liabilities, net

 

102,720

   

105,290

 

Liabilities associated with investment properties held for sale

 

1,142

   

864

 

Other liabilities

 

75,339

   

74,501

 

Total liabilities

 

2,161,846

   

2,300,887

 
         

Commitments and contingencies

       
         

Equity:

       

Preferred stock, $0.001 par value, 10,000 shares authorized, 7.00% Series A cumulative redeemable preferred stock, 5,400 shares issued and outstanding as of June 30, 2017 and December 31, 2016; liquidation preference $135,000

 

5

   

5

 

Class A common stock, $0.001 par value, 475,000 shares authorized, 230,943 and 236,770 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively

 

231

   

237

 

Additional paid-in capital

 

4,853,680

   

4,927,155

 

Accumulated distributions in excess of earnings

 

(2,752,648)

   

(2,776,033)

 

Accumulated other comprehensive income

 

1,209

   

722

 

Total equity

 

2,102,477

   

2,152,086

 

Total liabilities and equity

 

$

4,264,323

   

$

4,452,973

 

 

Retail Properties of America, Inc.

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share amounts)

(unaudited)

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

   

2017

 

2016

 

2017

 

2016

Revenues

               

Rental income

 

$

106,017

   

$

115,194

   

$

215,991

   

$

230,454

 

Tenant recovery income

 

29,524

   

29,654

   

60,310

   

60,010

 

Other property income

 

1,798

   

2,378

   

4,731

   

5,401

 

Total revenues

 

137,339

   

147,226

   

281,032

   

295,865

 
                 

Expenses

               

Operating expenses

 

21,004

   

20,092

   

42,868

   

43,153

 

Real estate taxes

 

21,487

   

21,090

   

43,366

   

41,029

 

Depreciation and amortization

 

52,325

   

53,443

   

105,799

   

106,839

 

Provision for impairment of investment properties

 

13,034

   

4,142

   

13,034

   

6,306

 

General and administrative expenses

 

10,370

   

10,773

   

21,583

   

22,179

 

Total expenses

 

118,220

   

109,540

   

226,650

   

219,506

 
                 

Operating income

 

19,119

   

37,686

   

54,382

   

76,359

 
                 

Gain on extinguishment of debt

 

   

   

   

13,653

 

Gain on extinguishment of other liabilities

 

   

6,978

   

   

6,978

 

Interest expense

 

(21,435)

   

(25,977)

   

(106,967)

   

(52,741)

 

Other income, net

 

451

   

302

   

456

   

427

 

(Loss) income from continuing operations

 

(1,865)

   

18,989

   

(52,129)

   

44,676

 

Gain on sales of investment properties

 

116,628

   

9,613

   

157,792

   

31,352

 

Net income

 

114,763

   

28,602

   

105,663

   

76,028

 

Preferred stock dividends

 

(2,363)

   

(2,363)

   

(4,725)

   

(4,725)

 

Net income attributable to common shareholders

 

$

112,400

   

$

26,239

   

$

100,938

   

$

71,303

 
                 

Earnings per common share – basic and diluted

               

Net income per common share attributable to common shareholders

 

$

0.48

   

$

0.11

   

$

0.43

   

$

0.30

 
                 

Weighted average number of common shares outstanding – basic

 

234,243

   

236,716

   

235,269

   

236,647

 
                 

Weighted average number of common shares outstanding – diluted

 

234,818

   

236,902

   

235,842

   

236,781

 

 

Retail Properties of America, Inc.

Reconciliation of Non-GAAP Financial Measures

(amounts in thousands, except per share amounts)

(unaudited)

 

Funds From Operations (FFO) Attributable to Common Shareholders and

Operating FFO Attributable to Common Shareholders

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

   

2017

 

2016

 

2017

 

2016

                 

Net income attributable to common shareholders

 

$

112,400

   

$

26,239

   

$

100,938

   

$

71,303

 

Depreciation and amortization of depreciable real estate

 

51,911

   

53,100

   

104,990

   

106,194

 

Provision for impairment of investment properties

 

13,034

   

4,142

   

13,034

   

4,142

 

Gain on sales of depreciable investment properties

 

(116,628)

   

(9,613)

   

(157,792)

   

(31,352)

 

FFO attributable to common shareholders

 

$

60,717

   

$

73,868

   

$

61,170

   

$

150,287

 
                 

FFO attributable to common shareholders per common share outstanding

 

$

0.26

   

$

0.31

   

$

0.26

   

$

0.64

 
                 
                 

FFO attributable to common shareholders

 

$

60,717

   

$

73,868

   

$

61,170

   

$

150,287

 

Impact on earnings from the early extinguishment of debt, net

 

2,312

   

4

   

68,669

   

(12,842)

 

Provision for hedge ineffectiveness

 

5

   

3

   

11

   

3

 

Provision for impairment of non-depreciable investment property

 

   

   

   

2,164

 

Gain on extinguishment of other liabilities

 

   

(6,978)

   

   

(6,978)

 

Other (a)

 

(149)

   

(184)

   

(19)

   

(184)

 

Operating FFO attributable to common shareholders

 

$

62,885

   

$

66,713

   

$

129,831

   

$

132,450

 
                 

Operating FFO attributable to common shareholders per common share outstanding

 

$

0.27

   

$

0.28

   

$

0.55

   

$

0.56

 
                 

Weighted average number of common shares outstanding – basic

 

234,243

   

236,716

   

235,269

   

236,647

 
   

(a)

Primarily consists of the impact on earnings from actual or anticipated settlement of litigation involving the Company, including associated legal costs, which are included in "Other income, net" in the condensed consolidated statements of operations.

 

FFO Attributable to Common Shareholders and Operating FFO Attributable to Common Shareholders Guidance

 
   

Per Share Guidance Range

Full Year 2017

   

Low

 

High

         

Net income attributable to common shareholders

 

$

0.95

   

$

1.00

 

Depreciation and amortization of depreciable real estate

 

0.86

   

0.86

 

Provision for impairment of investment properties

 

0.06

   

0.06

 

Gain on sales of depreciable investment properties

 

(1.19)

   

(1.19)

 

FFO attributable to common shareholders

 

$

0.68

   

$

0.73

 
         

Impact on earnings from the early extinguishment of debt

 

0.30

   

0.30

 

Provision for hedge ineffectiveness

 

   

 

Preferred stock redemption in excess of carrying value

 

0.02

   

0.02

 

Other

 

   

 

Operating FFO attributable to common shareholders

 

$

1.00

   

$

1.05

 

 

Retail Properties of America, Inc.

Reconciliation of Non-GAAP Financial Measures (continued)

(amounts in thousands)

(unaudited)

 

Reconciliation of Net Income Attributable to Common Shareholders to Same Store NOI

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

   

2017

 

2016

 

2017

 

2016

                 

Net income attributable to common shareholders

 

$

112,400

   

$

26,239

   

$

100,938

   

$

71,303

 

Adjustments to reconcile to Same Store NOI:

               

Preferred stock dividends

 

2,363

   

2,363

   

4,725

   

4,725

 

Gain on sales of investment properties

 

(116,628)

   

(9,613)

   

(157,792)

   

(31,352)

 

Depreciation and amortization

 

52,325

   

53,443

   

105,799

   

106,839

 

Provision for impairment of investment properties

 

13,034

   

4,142

   

13,034

   

6,306

 

General and administrative expenses

 

10,370

   

10,773

   

21,583

   

22,179

 

Gain on extinguishment of debt

 

   

   

   

(13,653)

 

Gain on extinguishment of other liabilities

 

   

(6,978)

   

   

(6,978)

 

Interest expense

 

21,435

   

25,977

   

106,967

   

52,741

 

Straight-line rental income, net

 

(919)

   

(800)

   

(1,260)

   

(1,828)

 

Amortization of acquired above and below market lease intangibles, net

 

(549)

   

(395)

   

(1,280)

   

(971)

 

Amortization of lease inducements

 

259

   

321

   

582

   

552

 

Lease termination fees

 

(510)

   

(1,027)

   

(2,122)

   

(2,685)

 

Straight-line ground rent expense

 

677

   

764

   

1,363

   

1,680

 

Amortization of acquired ground lease intangibles

 

(140)

   

(140)

   

(280)

   

(280)

 

Other income, net

 

(451)

   

(302)

   

(456)

   

(427)

 

NOI

 

93,666

   

104,767

   

191,801

   

208,151

 

NOI from Other Investment Properties

 

(12,455)

   

(24,990)

   

(28,948)

   

(48,404)

 

Same Store NOI

 

$

81,211

   

$

79,777

   

$

162,853

   

$

159,747

 

 

Retail Properties of America, Inc.

Reconciliation of Non-GAAP Financial Measures (continued)

(amounts in thousands, except ratios)

(unaudited)

 

Reconciliation of Mortgages Payable, Net, Unsecured Notes Payable, Net, Unsecured Term Loans, Net and

Unsecured Revolving Line of Credit to Total Net Debt and Total Net Debt and Preferred Stock

 
   

June 30,
2017

 

December 31,
2016

         

Mortgages payable, net

 

$

355,239

   

$

769,184

 

Unsecured notes payable, net

 

695,441

   

695,143

 

Unsecured term loans, net

 

646,554

   

447,598

 

Unsecured revolving line of credit

 

182,000

   

86,000

 

Total

 

1,879,234

   

1,997,925

 

Mortgage premium, net of accumulated amortization

 

(1,223)

   

(1,437)

 

Mortgage discount, net of accumulated amortization

 

601

   

622

 

Unsecured notes payable discount, net of accumulated amortization

 

912

   

971

 

Capitalized loan fees, net of accumulated amortization

 

7,865

   

11,314

 

Total notional debt

 

1,887,389

   

2,009,395

 

Less: consolidated cash and cash equivalents

 

(28,003)

   

(53,119)

 

Less: disposition proceeds temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges

 

(93,561)

   

 

Total net debt

 

1,765,825

   

1,956,276

 

Series A preferred stock

 

135,000

   

135,000

 

Total net debt and preferred stock

 

$

1,900,825

   

$

2,091,276

 

Net Debt to Adjusted EBITDA (a)

 

5.2x 

   

5.6x 

 

Net Debt and Preferred Stock to Adjusted EBITDA (a)

 

5.6x 

   

6.0x 

 

 

Reconciliation of Net Income Attributable to Common Shareholders to Adjusted EBITDA

 
   

Three Months Ended

   

June 30, 2017

 

December 31, 2016

         

Net income attributable to common shareholders

 

$

112,400

   

$

15,932

 

Preferred stock dividends

 

2,363

   

2,363

 

Interest expense

 

21,435

   

31,387

 

Depreciation and amortization

 

52,325

   

60,828

 

Gain on sales of investment properties

 

(116,628)

   

(31,970)

 

Provision for impairment of investment properties

 

13,034

   

9,328

 

Adjusted EBITDA

 

$

84,929

   

$

87,868

 

Annualized

 

$

339,716

   

$

351,472

 
   

(a)

For purposes of these ratio calculations, annualized three months ended figures were used.

 

RPAI Logo

 

 

View original content with multimedia:http://www.prnewswire.com/news-releases/retail-properties-of-america-inc-reports-second-quarter-and-year-to-date-results-300497788.html

SOURCE Retail Properties of America, Inc.

Contact Information
Investor Relations
RETAIL PROPERTIES OF AMERICA, INC.
2021 Spring Road Suite 200
Oak Brook, IL 60523
ir@rpai.com
TRANSFER AGENT
COMPUTERSHARE
P.O. BOX 505000
Louisville, KY 40233
(800) 368-5948