Exhibit

EX-99.1 2 ex-9916x30x19.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1

RETAIL PROPERTIES OF AMERICA, INC. REPORTS

SECOND QUARTER AND YEAR TO DATE 2019 RESULTS

Oak Brook, IL – July 30, 2019 – Retail Properties of America, Inc. (NYSE: RPAI) (the “Company”) today reported financial and operating results for the quarter and six months ended June 30, 2019.

FINANCIAL RESULTS

For the quarter ended June 30, 2019, the Company reported:


▪	Net income attributable to common shareholders of $21.2 million, or $0.10 per diluted share, compared to $10.9 million, or $0.05 per diluted share, for the same period in 2018;


▪	Funds from operations (FFO) attributable to common shareholders of $55.2 million, or $0.26 per diluted share, compared to $55.0 million, or $0.25 per diluted share, for the same period in 2018; and


▪	Operating funds from operations (Operating FFO) attributable to common shareholders of $55.8 million, or $0.26 per diluted share, compared to $55.1 million, or $0.25 per diluted share, for the same period in 2018.

For the six months ended June 30, 2019, the Company reported:


▪	Net income attributable to common shareholders of $44.4 million, or $0.21 per diluted share, compared to $52.7 million, or $0.24 per diluted share, for the same period in 2018;


▪	FFO attributable to common shareholders of $112.9 million, or $0.53 per diluted share, compared to $107.8 million, or $0.49 per diluted share, for the same period in 2018; and


▪	Operating FFO attributable to common shareholders of $114.2 million, or $0.54 per diluted share, compared to $110.8 million, or $0.51 per diluted share, for the same period in 2018.

OPERATING RESULTS

For the quarter ended June 30, 2019, the Company’s portfolio results were as follows:


▪	2.9% increase in same store net operating income (NOI) over the comparable period in 2018;


▪	Retail portfolio occupancy: 92.4% at June 30, 2019, down 60 basis points from 93.0% at March 31, 2019 and up 40 basis points from 92.0% at June 30, 2018;


▪	Total same store portfolio percent leased, including leases signed but not commenced: 94.6% at June 30, 2019, down 40 basis points from 95.0% at March 31, 2019 and up 110 basis points from 93.5% at June 30, 2018;


▪	Retail portfolio percent leased, including leases signed but not commenced: 94.7% at June 30, 2019, down 40 basis points from 95.1% at March 31, 2019 and up 120 basis points from 93.5% at June 30, 2018;


▪	Retail portfolio annualized base rent (ABR) per occupied square foot of $19.27 at June 30, 2019, up 0.5% from $19.17 ABR per occupied square foot at March 31, 2019;


▪	519,000 square feet of retail leasing transactions comprised of 120 new and renewal leases; and


▪	Positive comparable cash leasing spreads of 13.2% on new leases and 6.9% on renewal leases for a blended re-leasing spread of 8.2%.

n Retail Properties of America, Inc.

T: 855.247.RPAI

www.rpai.com 2021 Spring Road, Suite 200

Oak Brook, IL 60523

For the six months ended June 30, 2019, the Company’s portfolio results were as follows:


▪	2.9% increase in same store NOI over the comparable period in 2018;


▪	1,374,000 square feet of retail leasing transactions comprised of 237 new and renewal leases; and


▪	Positive comparable cash leasing spreads of 11.4% on new leases and 5.7% on renewal leases for a blended re-leasing spread of 6.8%.

“We continued our above-plan performance with 2.9% same store NOI growth in the second quarter,” stated Steve Grimes, chief executive officer. “Base rent expansion contributed the majority of this growth, coupled with outperformance in several other categories. As we look ahead to the second half of the year, we remain acutely focused on realizing occupancy and delivering the majority of the $9.4 million in ABR from our signed but not commenced leases.”

INVESTMENT ACTIVITY

Dispositions

To date in 2019, the Company has completed two retail property dispositions totaling $44.8 million. During the quarter, the Company completed the sale of one non-target multi-tenant power center asset for $18.9 million, which marked its exit from South Carolina.

Additionally, during the quarter, the Company closed on the sale of land and the rights to develop 10 residential units at its One Loudoun Downtown multi-tenant retail operating property in the Washington, D.C. metropolitan statistical area for a gross sales price of $2.3 million. Subsequent to quarter end, the Company closed on the sale of land and the rights to develop the remaining 12 residential units for a gross sales price of $2.8 million.

Expansions and Redevelopments

Plaza del Lago

During the quarter, as previously reported, the Company completed the redevelopment of 18 apartment units at the historic Plaza del Lago mixed-use shopping center along Chicago’s North Shore in Wilmette, Illinois. The renovated units, known as “The Residences at Plaza del Lago,” provide residents with premier access to Chicago’s lakefront, walking trails, beaches, Northwestern University, public transportation and a diverse retail offering including boutique shops, restaurants and grocery. To date, the Company has signed leases with residents for 12 of the 18 apartment units.

One Loudoun Downtown

During the quarter, the Company and KETTLER, its joint venture partner, broke ground on One Loudoun’s first apartment community, Vyne. Inspired by nature and Virginia’s acclaimed wine country, the apartment community will offer elevated living spaces in the Washington, D.C. suburbs. Vyne will serve as the focal point of the larger mixed-use expansion project of Pads G & H at One Loudoun Downtown. The community will span two blocks and include over 22,000 square feet of street level retail space, 378 one- and two-bedroom units, and luxury amenities including a standalone clubhouse with rooftop terrace, co-working space, resident lounges, fitness center with studio, swimming pool, pet spa and two lushly landscaped courtyards offering four season outdoor amenities. Vyne is anticipated to open in late spring 2021.

Carillon

During the quarter, as previously announced, the Company executed a joint venture agreement with Trammell Crow to construct the medical office building portion of Phase One of the mixed-use project at Carillon. The retail portion of Phase One is 37% pre-leased as of June 30, 2019. Subsequent to quarter end, the Company began demolition of approximately 290,000 square feet of vacant retail gross leasable area. In addition, construction on the adjacent hospital continues

to progress and recently passed a major milestone with the installation of the uppermost structural element and closure of the building.

Circle East

The Company remains in advanced lease negotiations with several leading regional and national retailers at its mixed-use project, Circle East. Additionally, AvalonBay has outlined expectations for tenant move-ins to the AvalonBay-owned multi-family portion of the project to begin in the first quarter of 2020, which remains in line with the Company’s scheduled completion date for the entire project that will result in 80,000 square feet of dual-sided street level retail.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

As of June 30, 2019, the Company had approximately $1.6 billion of consolidated indebtedness with a weighted average contractual interest rate of 4.04%, a weighted average maturity of 4.7 years and a net debt to adjusted EBITDAre ratio of 5.5x.

During the quarter, as previously announced, the Company entered into a note purchase agreement with certain institutional investors in a private placement transaction pursuant to which the Company issued $100.0 million of 10-year 4.82% senior unsecured notes on June 28, 2019. The proceeds were used to repay borrowings on the Company’s unsecured revolving line of credit on the same day.

Subsequent to quarter end, the Company entered into a term loan agreement with a group of financial institutions for a five-year $120.0 million unsecured term loan (Term Loan Due 2024) and a seven-year $150.0 million unsecured term loan (Term Loan Due 2026). The term loans bear interest at a rate of LIBOR plus a credit spread based on a leverage grid ranging from 1.20% to 1.70% for the Term Loan Due 2024 and 1.50% to 2.20% for the Term Loan Due 2026. Both term loans currently bear interest at the low end of the leverage grid. In accordance with the term loan agreement, the Company may elect to convert to an investment grade pricing grid. The Company subsequently entered into agreements to swap $120.0 million of LIBOR-based variable rate debt to a fixed interest rate of 1.68% through July 2024 and $150.0 million of LIBOR-based variable rate debt to a fixed interest rate of 1.77% through July 2026, each with an effective date of August 15, 2019. The Company used a portion of the proceeds to repay all amounts outstanding on its unsecured revolving line of credit, resulting in an undrawn revolver.

2019 GUIDANCE

The Company expects to generate net income attributable to common shareholders of $0.19 to $0.22 per diluted share in 2019. The Company is updating its 2019 Operating FFO attributable to common shareholders guidance range to $1.04 to $1.07 per diluted share from $1.03 to $1.07 per diluted share, based, in part, on the following assumptions:


▪	Same store NOI growth of 1.75% to 2.75%;


▪	General and administrative expenses of $40 to $43 million;


▪	Additional acquisitions, including repurchases of Class A common stock, and property dispositions evaluated and executed opportunistically; and


▪	Aggregate issuances of $370 million of unsecured debt capital with proceeds primarily used to repay outstanding indebtedness.

DIVIDEND

On July 23, 2019, the Company declared the third quarter 2019 quarterly cash dividend of $0.165625 per share on its outstanding Class A common stock, which will be paid on October 10, 2019 to Class A common shareholders of record on September 26, 2019.

WEBCAST AND CONFERENCE CALL INFORMATION

The Company’s management team will hold a webcast on Wednesday, July 31, 2019 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 July 31, 2019 until midnight (ET) on August 14, 2019. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering pin number 13691179.

SUPPLEMENTAL INFORMATION

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

ABOUT RPAI

Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located open-air shopping centers, including properties with a mixed-use component. As of June 30, 2019, the Company owned 104 retail operating properties in the United States representing 20.0 million square feet. The Company is publicly traded on the New York Stock Exchange under the ticker symbol RPAI. Additional information about the Company is available at www.rpai.com.

SAFE HARBOR LANGUAGE

The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “should,” “intends,” “plans,” “estimates” or “anticipates” and variations of such words or similar expressions or the negative of such words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic, business and financial conditions, and changes in the Company’s industry and changes in the real estate markets in particular, 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, adverse impact of e-commerce developments and shifting consumer retail behavior on 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 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, 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 computed in accordance with generally accepted accounting principles (GAAP), excluding (i) depreciation and amortization related to real estate, (ii) gains from sales of real estate assets, (iii) gains and losses from change in control and (iv) impairment write-downs of real estate assets and investments in entities directly attributable to decreases in the value of real estate held by the entity. The Company has adopted the NAREIT definition in its computation of FFO attributable to common shareholders. The Company believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing its performance and operations to those of other real estate investment trusts (REITs). The Company believes that FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends.

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

The Company also reports Net Operating Income (NOI), which it defines as all revenues other than (i) straight-line rental income (non-cash), (ii) amortization of lease inducements, (iii) amortization of acquired above and below market lease intangibles and (iv) lease termination fee income, less real estate taxes and all operating expenses other than lease termination fee expense and non-cash ground rent expense, which is comprised of straight-line ground rent expense and amortization of acquired ground lease intangibles for the three and six months ended June 30, 2018 and amortization of right-of-use lease assets and amortization of lease liabilities for the three and six months ended June 30, 2019. NOI consists of Same Store NOI and NOI from Other Investment Properties. Same Store NOI for the three and six months ended June 30, 2019 represents NOI from the Company’s same store portfolio consisting of 102 retail operating properties acquired or placed in service and stabilized prior to January 1, 2018. NOI from Other Investment Properties for the three and six months ended June 30, 2019 represents NOI primarily from (i) properties acquired or placed in service during 2018 and 2019, including Reisterstown Road Plaza, which was reclassified from active redevelopment into the Company’s retail operating portfolio during 2018, (ii) Circle East, which is in active redevelopment, (iii) the multi-family rental units at Plaza del Lago, which are in active redevelopment, (iv) One Loudoun Downtown – Pads G & H, which are in active redevelopment, (v) Carillon, where the Company has begun activities in anticipation of future redevelopment, (vi) properties that were sold or held for sale during 2018 and 2019, and (vii) the net income from the Company’s wholly-owned captive insurance company. The Company believes that NOI, Same Store NOI and NOI from Other Investment Properties, which are supplemental non-GAAP financial measures, provide an additional and useful operating perspective not immediately apparent from “Net income” or “Net income attributable to common shareholders” in accordance with GAAP. The Company uses these measures to evaluate its performance on a property-by-property basis because they allow management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company’s operating results. NOI, Same Store NOI and NOI from Other Investment Properties do not represent alternatives to “Net income” or “Net income attributable to common shareholders” in accordance with GAAP as indicators of the Company’s financial performance. Comparison of the Company’s presentation of NOI, Same Store NOI and NOI from Other Investment Properties to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

As defined by NAREIT, EBITDA for real estate (EBITDAre) means net income (loss) computed in accordance with GAAP, plus (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) impairment charges on investment property and (v) impairment charges on investments in unconsolidated affiliates if caused by a decrease in the value of depreciable property in the affiliate, plus or minus (i) gains from sales of investment property, including gains (or losses) on change in control, and (ii) adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates.

The Company reports Adjusted EBITDAre, which excludes the impact of certain discrete non-operating transactions and other events such as the impact on earnings from executive separation. The Company believes that Adjusted EBITDAre is useful because it allows investors and management to evaluate and compare the Company’s performance from period to period in a meaningful and consistent manner in addition to standard financial measurements under GAAP. EBITDAre and Adjusted EBITDAre are supplemental non-GAAP financial measures and should not be considered alternatives to “Net income” or “Net income attributable to common shareholders” as indicators of the Company’s financial performance. Comparison of the Company’s presentation of EBITDAre and Adjusted EBITDAre to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

Net Debt to Adjusted EBITDAre is a supplemental non-GAAP financial measure and represents (i) the Company’s total debt principal, which excludes unamortized premium, discount and capitalized loan fees, less (ii) cash and cash equivalents divided by (iii) Adjusted EBITDAre for the prior three months, annualized (Annualized Adjusted EBITDAre). The Company believes that this ratio is useful because it provides investors with information regarding its total debt principal net of cash and cash equivalents, which could be used to repay debt, compared to its performance as measured using Annualized Adjusted EBITDAre. Comparison of the Company’s presentation of Net Debt to Adjusted EBITDAre to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.

CONTACT INFORMATION

Michael Gaiden

Vice President – 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, 2019			December 31, 2018
Assets
Investment properties:
Land	$	1,037,381		$	1,036,901
Building and other improvements	3,587,241			3,607,484
Developments in progress	69,963			48,369
	4,694,585			4,692,754
Less accumulated depreciation	(1,358,059		)	(1,313,602		)
Net investment properties	3,336,526			3,379,152

Cash and cash equivalents	28,456			14,722
Accounts and notes receivable, net	77,337			78,398
Acquired lease intangible assets, net	88,492			97,090
Right-of-use lease assets	50,881			—
Other assets, net	71,387			78,108
Total assets	$	3,653,079		$	3,647,470

Liabilities and Equity
Liabilities:
Mortgages payable, net (includes unamortized premium of $650 and $775, respectively, unamortized discount of $(515) and $(536), respectively, and unamortized capitalized loan fees of $(329) and $(369), respectively)	$	203,726		$	205,320
Unsecured notes payable, net (includes unamortized discount of $(675) and $(734), respectively, and unamortized capitalized loan fees of $(3,423) and $(2,904), respectively)	795,902			696,362
Unsecured term loans, net (includes unamortized capitalized loan fees of $(2,243) and $(2,633), respectively)	447,757			447,367
Unsecured revolving line of credit	193,000			273,000
Accounts payable and accrued expenses	57,940			82,942
Distributions payable	35,388			35,387
Acquired lease intangible liabilities, net	67,505			86,543
Lease liabilities	91,129			—
Other liabilities	46,111			73,540
Total liabilities	1,938,458			1,900,461

Commitments and contingencies

Equity:
Preferred stock, $0.001 par value, 10,000 shares authorized, none issued or outstanding	—			—
Class A common stock, $0.001 par value, 475,000 shares authorized, 213,662 and 213,176 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively	214			213
Additional paid-in capital	4,507,488			4,504,702
Accumulated distributions in excess of earnings	(2,783,183		)	(2,756,802		)
Accumulated other comprehensive loss	(11,343		)	(1,522		)
Total shareholders' equity	1,713,176			1,746,591
Noncontrolling interests	1,445			418
Total equity	1,714,621			1,747,009
Total liabilities and equity	$	3,653,079		$	3,647,470

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,
	2019			2018			2019			2018
Revenues:
Lease income	$	118,449		$	119,164		$	241,152		$	244,006

Expenses:
Operating expenses	17,129			19,384			34,815			39,639
Real estate taxes	18,534			17,701			36,937			38,169
Depreciation and amortization	42,882			43,710			86,149			88,938
Provision for impairment of investment properties	—			724			—			1,316
General and administrative expenses	9,353			10,274			19,852			22,769
Total expenses	87,898			91,793			177,753			190,831

Other (expense) income:
Interest expense	(17,363		)	(16,817		)	(34,793		)	(35,582		)
Gain on sales of investment properties	8,454			—			16,903			34,519
Other (expense) income, net	(472		)	328			(1,131		)	550
Net income	21,170			10,882			44,378			52,662
Net income attributable to noncontrolling interests	—			—			—			—
Net income attributable to common shareholders	$	21,170		$	10,882		$	44,378		$	52,662

Earnings per common share – basic and diluted:
Net income per common share attributable to common shareholders	$	0.10		$	0.05		$	0.21		$	0.24

Weighted average number of common shares outstanding – basic	212,951			218,982			212,900			218,915

Weighted average number of common shares outstanding – diluted	213,090			219,410			213,156			219,406

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,
	2019			2018		2019			2018

Net income attributable to common shareholders	$	21,170		$	10,882	$	44,378		$	52,662
Depreciation and amortization of real estate	42,531			43,415		85,444			88,365
Provision for impairment of investment properties	—			724		—			1,316
Gain on sales of investment properties	(8,454		)	—		(16,903		)	(34,519		)	(a)
FFO attributable to common shareholders	$	55,247		$	55,021	$	112,919		$	107,824		(a)

FFO attributable to common shareholders per common share outstanding – diluted	$	0.26		$	0.25	$	0.53		$	0.49		(a)

FFO attributable to common shareholders	$	55,247		$	55,021	$	112,919		$	107,824
Impact on earnings from the early extinguishment of debt, net	—			24		—			1,052
Impact on earnings from executive separation (b)	—			—		—			1,737
Other (c)	569			16		1,280			223
Operating FFO attributable to common shareholders	$	55,816		$	55,061	$	114,199		$	110,836

Operating FFO attributable to common shareholders per common share outstanding – diluted	$	0.26		$	0.25	$	0.54		$	0.51

Weighted average number of common shares outstanding – diluted	213,090			219,410		213,156			219,406

(a)

The Company adopted the National Association of Real Estate Investment Trusts' "NAREIT Funds From Operations White Paper – 2018 Restatement" effective January 1, 2019 on a retrospective basis. As a result of the adoption, all gains on sale and impairments of real estate are excluded from FFO, whereas the Company previously only excluded gains on sale and impairments of depreciable investment properties. The Company restated FFO attributable to common shareholders for the six months ended June 30, 2018 to exclude the gain on sale of non-depreciable investment property of $2,179. As this gain was previously excluded from Operating FFO attributable to common shareholders, there was no change to Operating FFO attributable to common shareholders for the six months ended June 30, 2018.


(b)	Reflected as an increase within "General and administrative expenses" in the condensed consolidated statements of operations.


(c)	Primarily consists of the impact on earnings from litigation involving the Company, including actual or anticipated settlement and associated legal costs, which are included within "Other (expense) 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 2019
	Low			High

Net income attributable to common shareholders	$	0.19		$	0.22
Depreciation and amortization of real estate	0.90			0.90
Gain on sales of investment properties	(0.09		)	(0.09		)
FFO attributable to common shareholders	$	1.00		$	1.03

Impact on earnings from the early extinguishment of debt	0.04			0.04
Other	—			—
Operating FFO attributable to common shareholders	$	1.04		$	1.07

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,
	2019			2018			2019			2018

Net income attributable to common shareholders	$	21,170		$	10,882		$	44,378		$	52,662
Adjustments to reconcile to Same Store NOI:
Gain on sales of investment properties	(8,454		)	—			(16,903		)	(34,519		)
Depreciation and amortization	42,882			43,710			86,149			88,938
Provision for impairment of investment properties	—			724			—			1,316
General and administrative expenses	9,353			10,274			19,852			22,769
Interest expense	17,363			16,817			34,793			35,582
Straight-line rental income, net	(616		)	(1,401		)	(2,116		)	(3,880		)
Amortization of acquired above and below market lease intangibles, net	(711		)	(2,354		)	(3,045		)	(3,208		)
Amortization of lease inducements	319			246			615			487
Lease termination fees, net	(232		)	1,692			(1,420		)	673
Non-cash ground rent expense, net	332			439			690			965
Other expense (income), net	472			(328		)	1,131			(550		)
NOI	81,878			80,701			164,124			161,235
NOI from Other Investment Properties	(2,186		)	(3,269		)	(4,541		)	(6,117		)
Same Store NOI	$	79,692		$	77,432		$	159,583		$	155,118

Retail Properties of America, Inc.

Reconciliation of Non-GAAP Financial Measures (continued)

(amounts in thousands, except ratio)

(unaudited)

Reconciliation of Mortgages Payable, Net, Unsecured Notes Payable, Net,

Unsecured Term Loans, Net and Unsecured Revolving Line of Credit to Total Net Debt



	June 30, 2019			December 31, 2018

Mortgages payable, net	$	203,726		$	205,320
Unsecured notes payable, net	795,902			696,362
Unsecured term loans, net	447,757			447,367
Unsecured revolving line of credit	193,000			273,000
Total	1,640,385			1,622,049
Mortgage premium, net of accumulated amortization	(650		)	(775		)
Mortgage discount, net of accumulated amortization	515			536
Unsecured notes payable discount, net of accumulated amortization	675			734
Capitalized loan fees, net of accumulated amortization	5,995			5,906
Total debt principal	1,646,920			1,628,450
Less: consolidated cash and cash equivalents	(28,456		)	(14,722		)
Total net debt	$	1,618,464		$	1,613,728
Net Debt to Adjusted EBITDAre (a)	5.5x			5.5x

Reconciliation of Net Income to Adjusted EBITDAre



	Three Months Ended
	June 30, 2019			December 31, 2018

Net income	$	21,170		$	12,144
Interest expense	17,363			16,828
Depreciation and amortization	42,882			43,870
Gain on sales of investment properties	(8,454		)	—
Provision for impairment of investment properties	—			763
EBITDAre	$	72,961		$	73,605
Adjustments to EBITDAre	—			—
Adjusted EBITDAre	$	72,961		$	73,605
Annualized Adjusted EBITDAre	$	291,844		$	294,420


(a)	For purposes of this ratio calculation, annualized three months ended figures were used.