Maryland | 001-36160 | 45-2433192 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
99.1 | Combined Consolidated Financial Statements of Brixmor Operating Partnership LP as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011 | |
99.2 | Management's Discussion and Analysis of Financial Condition and Results of Operations as of December 31, 2013 and 2012, and years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011 | |
99.3 | Condensed Consolidated Financial Statements of Brixmor Operating Partnership LP as of September 30, 2014 and December 31, 2013, and for the nine months ended September 30, 2014 and 2013 | |
99.4 | Management's Discussion and Analysis of Financial Condition and Results of Operations as of September 30, 2014 and December 31, 2013, and for the nine months ended September 30, 2014 and 2013 |
BRIXMOR PROPERTY GROUP INC. | |
By: | /s/Steven F. Siegel |
Name: | Steven F. Siegel |
Title: | Executive Vice President and |
General Counsel |
Exhibit No. | Description | |
99.1 | Combined Consolidated Financial Statements of Brixmor Operating Partnership LP as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011 | |
99.2 | Management's Discussion and Analysis of Financial Condition and Results of Operations as of December 31, 2013 and 2012, and years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011 | |
99.3 | Condensed Consolidated Financial Statements of Brixmor Operating Partnership LP as of September 30, 2014 and December 31, 2013, and for the nine months ended September 30, 2014 and 2013 | |
99.4 | Management's Discussion and Analysis of Financial Condition and Results of Operations as of September 30, 2014 and December 31, 2013, and for the nine months ended September 30, 2014 and 2013 |
COMBINED CONSOLIDATED FINANCIAL STATEMENTS Brixmor Operating Partnership LP and Subsidiaries For the years Ended December 31, 2013 and 2012 (successor), the period from June 28, 2011 through December 31, 2011 (successor) and the period from January 1, 2011 through June 27, 2011 (predecessor) With Report of Independent Auditors |
Page | ||
COMBINED CONSOLIDATED STATEMENTS | ||
Report of Ernst & Young LLP, Registered Public Accounting Firm | ||
Consolidated Balance Sheets as of December 31, 2013 and 2012 | ||
Combined Consolidated Statements of Operations for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011 | ||
Combined Consolidated Statements of Comprehensive Loss for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011 | ||
Combined Consolidated Statement of Changes in Partners' Capital for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011 | ||
Combined Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011 | ||
Notes to Combined Consolidated Financial Statements | ||
Successor | |||||||
December 31, 2013 | December 31, 2012 | ||||||
Assets | |||||||
Real estate | |||||||
Land | $ | 2,055,802 | $ | 1,915,667 | |||
Buildings and improvements | 8,781,926 | 7,978,759 | |||||
10,837,728 | 9,894,426 | ||||||
Accumulated depreciation and amortization | (1,190,170 | ) | (796,296 | ) | |||
Real estate, net | 9,647,558 | 9,098,130 | |||||
Investments in and advances to unconsolidated joint ventures | 9,205 | 16,038 | |||||
Cash and cash equivalents | 113,006 | 97,481 | |||||
Restricted cash | 75,457 | 90,160 | |||||
Marketable securities | 21,907 | 24,681 | |||||
Receivables, net | 178,505 | 156,944 | |||||
Deferred charges and prepaid expenses, net | 105,522 | 95,118 | |||||
Other assets | 19,650 | 19,358 | |||||
Total assets | $ | 10,170,810 | $ | 9,597,910 | |||
Liabilities | |||||||
Debt obligations, net | $ | 5,981,289 | $ | 6,499,356 | |||
Financing liabilities, net | 175,111 | 174,440 | |||||
Accounts payable, accrued expenses and other liabilities | 709,519 | 632,110 | |||||
Total liabilities | 6,865,919 | 7,305,906 | |||||
Redeemable non-controlling interests | 21,467 | 21,467 | |||||
Commitments and contingencies | — | — | |||||
Capital | |||||||
Partnership common units; 304,230,758 and 240,905,467 units outstanding | 3,108,398 | 2,269,203 | |||||
Series A interest | 180,386 | — | |||||
Accumulated other comprehensive loss | (6,797 | ) | (36 | ) | |||
Total partners' capital | 3,281,987 | 2,269,167 | |||||
Non-controlling interests | 1,437 | 1,370 | |||||
Total capital | 3,283,424 | 2,270,537 | |||||
Total liabilities and capital | $ | 10,170,810 | $ | 9,597,910 |
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES | |||||||||||||||
COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(in thousands) | |||||||||||||||
Successor (Consolidated) | Predecessor (Combined Consolidated) | ||||||||||||||
Year Ended December 31, | Period from June 28, 2011 through December 31, | Period from January 1, 2011 through June 27, | |||||||||||||
2013 | 2012 | 2011 | 2011 | ||||||||||||
Revenues | |||||||||||||||
Rental income | $ | 887,819 | $ | 851,654 | $ | 429,365 | $ | 412,929 | |||||||
Expense reimbursements | 242,939 | 225,848 | 112,416 | 114,879 | |||||||||||
Other revenues | 16,135 | 11,233 | 5,331 | 7,588 | |||||||||||
Total revenues | 1,146,893 | 1,088,735 | 547,112 | 535,396 | |||||||||||
Operating expenses | |||||||||||||||
Operating costs | 116,566 | 118,929 | 59,461 | 64,409 | |||||||||||
Real estate taxes | 168,555 | 155,210 | 77,487 | 76,763 | |||||||||||
Depreciation and amortization | 438,730 | 488,714 | 283,763 | 168,690 | |||||||||||
Provision for doubtful accounts | 10,920 | 11,544 | 8,465 | 10,348 | |||||||||||
Impairment of real estate assets | 1,531 | — | — | — | |||||||||||
Acquisition related costs | — | — | — | 5,647 | |||||||||||
General and administrative | 121,079 | 88,931 | 49,874 | 57,363 | |||||||||||
Total operating expenses | 857,381 | 863,328 | 479,050 | 383,220 | |||||||||||
Other income (expense) | |||||||||||||||
Dividends and interest | 825 | 1,125 | 641 | 815 | |||||||||||
Interest expense | (343,311 | ) | (376,414 | ) | (199,221 | ) | (189,380 | ) | |||||||
Gain on sales of real estate assets and acquisition of joint venture interest | 2,223 | 501 | — | — | |||||||||||
Gain (loss) on extinguishment of debt, net | (20,063 | ) | — | 917 | — | ||||||||||
Other | (11,004 | ) | (513 | ) | 1,224 | (3,732 | ) | ||||||||
Total other income (expense) | (371,330 | ) | (375,301 | ) | (196,439 | ) | (192,297 | ) | |||||||
Loss before equity in income of unconsolidated joint ventures | (81,818 | ) | (149,894 | ) | (128,377 | ) | (40,121 | ) | |||||||
Equity in income (loss) of unconsolidated joint ventures | 1,167 | 687 | (160 | ) | (381 | ) | |||||||||
Impairment of investments in unconsolidated joint ventures | — | (314 | ) | — | — | ||||||||||
Loss from continuing operations | (80,651 | ) | (149,521 | ) | (128,537 | ) | (40,502 | ) | |||||||
Discontinued operations: | |||||||||||||||
Income (loss) from discontinued operations | 3,504 | (2,438 | ) | (5,762 | ) | 2,019 | |||||||||
Gain on disposition of operating properties | 3,392 | 5,369 | — | — | |||||||||||
Impairment on real estate held for sale | (45,122 | ) | (13,599 | ) | — | (8,608 | ) | ||||||||
Loss from discontinued operations | (38,226 | ) | (10,668 | ) | (5,762 | ) | (6,589 | ) | |||||||
Net loss | (118,877 | ) | (160,189 | ) | (134,299 | ) | (47,091 | ) | |||||||
Non-controlling interests | |||||||||||||||
Net income attributable to non-controlling interests | (1,355 | ) | (1,306 | ) | (653 | ) | (752 | ) | |||||||
Net loss attributable to Brixmor Operating Partnership LP | $ | (120,232 | ) | $ | (161,495 | ) | $ | (134,952 | ) | $ | (47,843 | ) | |||
Net income (loss) attributable to: | |||||||||||||||
Series A interest | $ | 3,451 | $ | — | $ | — | $ | — | |||||||
Partnership common units | (123,683 | ) | (161,495 | ) | (134,952 | ) | (47,843 | ) | |||||||
Net loss attributable to Brixmor Operating Partnership LP | $ | (120,232 | ) | $ | (161,495 | ) | $ | (134,952 | ) | $ | (47,843 | ) | |||
The accompanying notes are an integral part of these combined consolidated financial statements. |
Successor (Consolidated) | Predecessor (Combined Consolidated) | ||||||||||||||
Year Ended December 31, | Period from June 28, 2011 through December 31, | Period from January 1, 2011 through June 27, | |||||||||||||
2013 | 2012 | 2011 | 2011 | ||||||||||||
Net loss | $ | (118,877 | ) | $ | (160,189 | ) | $ | (134,299 | ) | $ | (47,091 | ) | |||
Other comprehensive income (loss) | |||||||||||||||
Unrealized loss on interest rate hedges | (6,795 | ) | — | — | — | ||||||||||
Unrealized gain (loss) on marketable securities | 34 | (80 | ) | 44 | 20 | ||||||||||
Comprehensive loss | (125,638 | ) | (160,269 | ) | (134,255 | ) | (47,071 | ) | |||||||
Comprehensive income attributable to non-controlling interests | (1,355 | ) | (1,306 | ) | (653 | ) | (752 | ) | |||||||
Comprehensive loss attributable to Brixmor Operating Partnership LP | $ | (126,993 | ) | $ | (161,575 | ) | $ | (134,908 | ) | $ | (47,823 | ) | |||
Comprehensive income (loss) attributable to: | |||||||||||||||
Series A interest | $ | 3,451 | $ | — | $ | — | $ | — | |||||||
Partnership common units | (130,444 | ) | (161,575 | ) | (134,908 | ) | (47,823 | ) | |||||||
Comprehensive loss attributable to Brixmor Operating Partnership LP | $ | (126,993 | ) | $ | (161,575 | ) | $ | (134,908 | ) | $ | (47,823 | ) |
Predecessor (Combined Consolidated) For the Period January 1, 2011 through June 27, 2011 | |||||||||||||||||||
CNP Net Investment | Series A Interest | Accumulated Other Comprehensive Income (loss) | Non-Controlling Interests | Total | |||||||||||||||
Beginning balance, January 1, 2011 | $ | 1,956,471 | $ | — | $ | (5 | ) | $ | 1,352 | $ | 1,957,818 | ||||||||
Contributions | 4,377 | — | — | — | 4,377 | ||||||||||||||
Distributions | (36,725 | ) | — | — | — | (36,725 | ) | ||||||||||||
Other reclassification adjustment | 2 | — | — | — | 2 | ||||||||||||||
Unrealized gain on marketable securities | — | — | 20 | — | 20 | ||||||||||||||
Non-controlling interest | — | — | — | (28 | ) | (28 | ) | ||||||||||||
Net income (loss) | (47,843 | ) | — | — | 116 | (47,727 | ) | ||||||||||||
Ending balance, June 27, 2011 | $ | 1,876,282 | $ | — | $ | 15 | $ | 1,440 | $ | 1,877,737 | |||||||||
Successor (Consolidated) For the Period June 28, 2011 through December 31, 2011 | |||||||||||||||||||
Partnership Common Units | Series A Interest | Accumulated Other Comprehensive Income | Non-Controlling Interest | Total | |||||||||||||||
Beginning balance, June 28, 2011 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Contributions from partners | 2,209,125 | — | — | — | 2,209,125 | ||||||||||||||
Equity based compensation expense | 1,070 | — | — | — | 1,070 | ||||||||||||||
Non-cash contribution of basis step-up | 328,826 | — | — | — | 328,826 | ||||||||||||||
Unrealized gain on marketable securities | — | — | 44 | — | 44 | ||||||||||||||
Issuance of non-controlling interests in subsidiary | — | — | — | 1,463 | 1,463 | ||||||||||||||
Net income (loss) | (134,952 | ) | — | — | 6 | (134,946 | ) | ||||||||||||
Ending balance, December 31, 2011 | $ | 2,404,069 | $ | — | $ | 44 | $ | 1,469 | $ | 2,405,582 | |||||||||
Successor (Consolidated) For the Year Ended December 31, 2012 | |||||||||||||||||||
Partnership Common Units | Series A Interest | Accumulated Other Comprehensive Income (loss) | Non-Controlling Interest | Total | |||||||||||||||
Beginning balance, January 1, 2012 | $ | 2,404,069 | $ | — | $ | 44 | $ | 1,469 | $ | 2,405,582 | |||||||||
Contributions from partners | 20,209 | — | — | — | 20,209 | ||||||||||||||
Distributions to non-controlling interests | — | — | — | (114 | ) | (114 | ) | ||||||||||||
Equity based compensation expense | 6,420 | — | — | — | 6,420 | ||||||||||||||
Unrealized loss on marketable securities | — | — | (80 | ) | — | (80 | ) | ||||||||||||
Net income (loss) | (161,495 | ) | — | — | 15 | (161,480 | ) | ||||||||||||
Ending balance, December 31, 2012 | $ | 2,269,203 | $ | — | $ | (36 | ) | $ | 1,370 | $ | 2,270,537 | ||||||||
Successor (Consolidated) For the Year Ended December 31, 2013 | |||||||||||||||||||
Partnership Common Units | Series A Interest | Accumulated Other Comprehensive loss | Non-Controlling Interest | Total | |||||||||||||||
Beginning balance, January 1, 2013 | $ | 2,269,203 | $ | — | $ | (36 | ) | $ | 1,370 | $ | 2,270,537 | ||||||||
Contributions from partners | 893,860 | — | — | — | 893,860 | ||||||||||||||
Distributions to partners | (59,359 | ) | (10,000 | ) | — | — | (69,359 | ) | |||||||||||
Issuance of Series A interest | (186,935 | ) | 186,935 | — | — | — | |||||||||||||
Equity based compensation expense | 36,395 | — | — | — | 36,395 | ||||||||||||||
Issuance of OP units for acquired properties | 317,556 | — | — | — | 317,556 | ||||||||||||||
Change in value of credit swap liability | — | — | (6,795 | ) | — | (6,795 | ) | ||||||||||||
Unrealized gain on marketable securities | — | — | 34 | — | 34 | ||||||||||||||
Declared but unpaid dividends and distributions | (38,639 | ) | — | — | — | (38,639 | ) | ||||||||||||
Net income (loss) | (123,683 | ) | 3,451 | — | 67 | (120,165 | ) | ||||||||||||
Ending balance, December 31, 2013 | $ | 3,108,398 | $ | 180,386 | $ | (6,797 | ) | $ | 1,437 | $ | 3,283,424 |
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES | |||||||||||||||
COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(in thousands) | |||||||||||||||
Successor (Consolidated) | Predecessor (Combined Consolidated) | ||||||||||||||
Year Ended December 31, | Period from June 28, 2011 through December 31, 2011 | Period from January 1, 2011 through June 27, 2011 | |||||||||||||
2013 | 2012 | ||||||||||||||
Operating activities: | |||||||||||||||
Net loss | $ | (118,877 | ) | $ | (160,189 | ) | $ | (134,299 | ) | $ | (47,091 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 450,279 | 510,435 | 298,698 | 179,371 | |||||||||||
Debt premium and discount amortization | (20,973 | ) | (25,314 | ) | (12,974 | ) | (2,832 | ) | |||||||
Deferred financing cost amortization | 10,831 | 10,272 | 4,812 | 5,166 | |||||||||||
Above and below market lease intangible amortization | (51,379 | ) | (50,881 | ) | (28,058 | ) | (33,989 | ) | |||||||
Provisions of impairment | 46,653 | 13,913 | — | 8,751 | |||||||||||
Gain on sale of real estate assets and acquisition of joint venture interest | (5,615 | ) | (5,870 | ) | — | (143 | ) | ||||||||
Amortization of Class B units | 36,395 | 6,420 | 1,070 | 999 | |||||||||||
Other | (1,165 | ) | (687 | ) | 210 | — | |||||||||
(Gain) loss on debt extinguishment, net | 16,498 | — | (917 | ) | — | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Restricted cash | 5,562 | (8,144 | ) | 10,823 | (18,103 | ) | |||||||||
Receivables | (17,055 | ) | (11,793 | ) | (7,706 | ) | 15,635 | ||||||||
Deferred charges and prepaid expenses | (22,826 | ) | (24,422 | ) | (5,992 | ) | (18,368 | ) | |||||||
Other assets | 2,901 | (2,692 | ) | — | 4,769 | ||||||||||
Accounts payable, accrued expenses and other liabilities | 759 | 18,461 | (27,671 | ) | 22,928 | ||||||||||
Net cash provided by operating activities | 331,988 | 269,509 | 97,996 | 117,093 | |||||||||||
Investing activities: | |||||||||||||||
Acquisition of the Business | — | — | (1,335,799 | ) | — | ||||||||||
Building improvements | (150,461 | ) | (177,213 | ) | (56,855 | ) | (59,073 | ) | |||||||
Acquisitions of real estate assets | (6,377 | ) | (6,000 | ) | — | — | |||||||||
Proceeds from sales of real estate assets | 58,994 | 50,609 | 719 | 53,453 | |||||||||||
Distributions from unconsolidated joint ventures | 593 | 1,640 | 1,434 | 3,233 | |||||||||||
Contributions to unconsolidated joint ventures | (25 | ) | (1,496 | ) | — | (2 | ) | ||||||||
Change in restricted cash attributable to investing activities | 8,108 | 16,266 | 7,370 | (16,922 | ) | ||||||||||
Purchase of marketable securities | (12,731 | ) | (21,913 | ) | (12,953 | ) | (10,984 | ) | |||||||
Proceeds from sale of marketable securities | 15,538 | 19,608 | 9,053 | 11,453 | |||||||||||
Net cash used in investing activities | (86,361 | ) | (118,499 | ) | (1,387,031 | ) | (18,842 | ) | |||||||
Financing activities: | |||||||||||||||
Repayment of debt obligations and financing liabilities | (2,702,931 | ) | (530,342 | ) | (2,415,462 | ) | (383,383 | ) | |||||||
Proceeds from debt obligations | 57,000 | 360,000 | 1,542,000 | 163,000 | |||||||||||
Repayment of borrowings under unsecured revolving credit facility | (914,108 | ) | — | — | — | ||||||||||
Proceeds from borrowings under unsecured credit facility | 2,534,286 | — | — | — | |||||||||||
Deferred financing costs | (27,529 | ) | (7,256 | ) | (39,243 | ) | (921 | ) | |||||||
Change in restricted cash attributable to financing activities | — | — | 100,123 | (100,123 | ) | ||||||||||
Partners contribution | 893,860 | 20,209 | 2,209,125 | — | |||||||||||
Contributions attributable to CNP net investment | — | — | — | 4,377 | |||||||||||
Distributions attributable to CNP net investment | — | — | — | (36,725 | ) | ||||||||||
Partners distributions | (69,359 | ) | — | — | — | ||||||||||
Distributions to non-controlling interests and other | (1,321 | ) | (1,758 | ) | (1,890 | ) | (798 | ) | |||||||
Net cash provided by (used in) financing activities | (230,102 | ) | (159,147 | ) | 1,394,653 | (354,573 | ) | ||||||||
Change in cash and cash equivalents | 15,525 | (8,137 | ) | 105,618 | (256,322 | ) | |||||||||
Cash and cash equivalents at beginning of period | 97,481 | 105,618 | — | 304,522 | |||||||||||
Cash and cash equivalents at end of period | $ | 113,006 | $ | 97,481 | $ | 105,618 | $ | 48,200 | |||||||
Supplemental cash flow information, including non-cash investing and/or financing activities: | |||||||||||||||
Cash paid for interest, net of amount capitalized | $ | 342,950 | $ | 388,320 | $ | 217,445 | $ | 185,597 | |||||||
State and local taxes paid | 2,013 | 2,754 | — | — | |||||||||||
Capitalized interest | 4,968 | 1,661 | 292 | 254 | |||||||||||
Fair value of Operating Partnership units issued for acquisition of real estate assets | 317,556 | — | — | — |
Building and building and land improvements | 20 - 40 years |
Furniture, fixtures, and equipment | 5 - 10 years |
Tenant improvements | The shorter of the term of the related lease or useful life |
Assets | |||
Real estate, net | $ | 888,134 | |
Cash and cash equivalents | 8,729 | ||
Restricted cash | 7,878 | ||
Receivables, net | 4,840 | ||
Deferred charges and prepaid expenses, net | 1,496 | ||
Other assets | 989 | ||
Total assets | $ | 912,066 | |
Liabilities | |||
Debt obligations, net | $ | 430,465 | |
Accounts payable, accrued expenses and other liabilities | 164,045 | ||
Total liabilities | 594,510 | ||
Net Assets Acquired | $ | 317,556 |
Year Ending December 31, | |||||||||
2013 | 2012 | 2011 | |||||||
Revenue | $ | 1,208,741 | $ | 1,162,498 | $ | 1,090,032 | |||
Net Loss | $ | (123,725 | ) | $ | (163,786 | ) | $ | (260,601 | ) |
Successor | Predecessor | |||||||||||||||
Year Ended December 31, 2013 | Year Ended December 31, 2012 | Period from June 28, 2011 to December 31, 2011 | Period from January 1, 2011 to June 27, 2011 | |||||||||||||
Discontinued operations: | ||||||||||||||||
Revenues | $ | 35,243 | $ | 50,609 | $ | 26,551 | $ | 26,593 | ||||||||
Operating expenses | (27,429 | ) | (42,132 | ) | (26,095 | ) | (22,068 | ) | ||||||||
Other expense, net | (4,310 | ) | (10,915 | ) | (6,218 | ) | (2,506 | ) | ||||||||
Income (loss) from discontinued operating properties | 3,504 | (2,438 | ) | (5,762 | ) | 2,019 | ||||||||||
Gain on disposition of operating properties | 3,392 | 5,369 | — | — | ||||||||||||
Impairment on real estate held for sale | (45,122 | ) | (13,599 | ) | — | (8,608 | ) | |||||||||
Loss from discontinued operations | $ | (38,226 | ) | $ | (10,668 | ) | $ | (5,762 | ) | $ | (6,589 | ) |
December 31, 2013 | December 31, 2012 | ||||||
Land | $ | 2,055,802 | $ | 1,915,667 | |||
Buildings and improvements: | |||||||
Building | 7,436,072 | 6,817,378 | |||||
Building and tenant improvements | 373,907 | 254,844 | |||||
Other rental property (1) | 971,947 | 906,537 | |||||
10,837,728 | 9,894,426 | ||||||
Accumulated depreciation and amortization | (1,190,170 | ) | (796,296 | ) | |||
Total | $ | 9,647,558 | $ | 9,098,130 |
(1) | At December 31, 2013 and 2012, Other rental property consisted of intangible assets including: (i) $881.9 million and $826.9 million, respectively, of in-place lease value; (ii) $90.0 million and $79.6 million, respectively, of above-market leases; and (iii) $462.5 million and $341.8 million, respectively, of accumulated amortization. These intangible assets are amortized over the term of each related lease. |
Year ending December 31, | Estimated net amortization expense | |||
2014 | $ | 74,553 | ||
2015 | 47,885 | |||
2016 | 23,183 | |||
2017 | 10,543 | |||
2018 | 4,194 |
Number of Instruments | Notional Amount | ||||||
Interest Rate Swaps | 5 | $ | 1,500,000 |
Fair Value of Derivative Instruments | ||||||||
Interest rate swaps classified as: | December 31, 2013 | December 31, 2012 | ||||||
Gross derivative assets | $ | — | $ | — | ||||
Gross derivative liabilities | (6,795 | ) | — | |||||
Net derivative liability | $ | (6,795 | ) | $ | — |
Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps and Caps) | Year Ended December 31, 2013 | |||
Amount of loss recognized in OCI on derivative | $ | (6,795 | ) | |
Amount of gain (loss) reclassified from accumulated OCI into interest expense | $ | — |
Number of Instruments | Notional Amount | ||||||
Interest Rate Caps | 10 | $ | 1,118,000 |
Successor | ||||||||||||
Carrying Value as of | ||||||||||||
December 31, 2013 | December 31, 2012 | Stated Interest Rates | Scheduled Maturity Date | |||||||||
Mortgage and secured loans(1) | ||||||||||||
Fixed rate mortgage and secured loans(2) | $ | 3,444,578 | $ | 5,330,442 | 4.85% - 8.18% | 2014 – 2021 | ||||||
Variable rate mortgage and secured loans(3) | 483,604 | 668,605 | Variable(3) | 2015 – 2017 | ||||||||
Total mortgage and secured loans | 3,928,182 | 5,999,047 | ||||||||||
Net unamortized premium | 93,077 | 116,222 | ||||||||||
Total mortgage and secured loans, net | $ | 4,021,259 | $ | 6,115,269 | ||||||||
Notes payables | ||||||||||||
Unsecured notes(4)(5) | $ | 353,617 | $ | 404,612 | 3.75% - 7.97% | 2014 - 2029 | ||||||
Net unamortized discount | (13,766 | ) | (20,525 | ) | ||||||||
Total notes payable, net | $ | 339,851 | $ | 384,087 | ||||||||
Unsecured Credit Facility(6) | $ | 1,620,179 | $ | — | 1.79% | 2017 – 2018 | ||||||
Total debt obligations | $ | 5,981,289 | $ | 6,499,356 |
(1) | The Operating Partnership's mortgages and secured loans are collateralized by certain properties and the equity interests of certain subsidiaries. These properties had a carrying value as of December 31, 2013 of approximately $5.4 billion. |
(2) | The weighted average interest rate on the Operating Partnership’s fixed rate mortgage and secured loans was 5.91% as of December 31, 2013. |
(3) | The weighted average interest rate on the Operating Partnership’s variable rate mortgage and secured loans was 3.80% as of December 31, 2013. The Operating Partnership incurs interest on $483.6 million of mortgages using the 30-day LIBOR rate (which was 0.17% as of December 31, 2013 subject to certain rate floor requirements ranging from 0 basis points to 75 basis points), plus interest spreads ranging from 300 basis points to 375 basis points. |
(4) | The weighted average interest rate on the Operating Partnership’s unsecured notes was 6.03% as of December 31, 2013. |
(5) | The Operating Partnership has a one-time put repurchase right to certain unsecured notes that requires the Operating Partnership to offer to repurchase the notes if tendered by holders (but does not require the holders to tender) for an amount equal to the principal amount plus accrued and unpaid interest on January 15, 2014. Although the stated maturity dates for these notes range from August 2026 to February 2028, the scheduled maturity dates listed above |
(6) | The Operating Partnership has in place five forward starting interest rate swap agreements that convert the floating interest rate on the $1.5 billion term loan facility to a fixed, combined interest rate of 0.844% plus an interest spread of 160 basis points. |
Year ending December 31, | ||||
2014 | $ | 327,553 | ||
2015 | 980,029 | |||
2016 | 1,335,445 | |||
2017 | 647,268 | |||
2018 | 1,521,557 | |||
Thereafter | 1,090,126 | |||
Total debt maturities | 5,901,978 | |||
Net unamortized premiums on mortgages | 93,077 | |||
Net unamortized discount on notes | (13,766 | ) | ||
Total debt obligations | $ | 5,981,289 |
December 31, 2013 | December 31, 2012 | |||||||||||||||
Carrying Amounts | Fair Value | Carrying Amounts | Fair Value | |||||||||||||
Mortgage and secured loans payable | $ | 4,021,259 | $ | 4,179,640 | $ | 6,115,269 | $ | 6,161,656 | ||||||||
Notes payable | 339,851 | 371,393 | 384,087 | 395,280 | ||||||||||||
Credit facility | 1,620,179 | 1,620,179 | — | — | ||||||||||||
Total debt obligations | $ | 5,981,289 | $ | 6,171,212 | $ | 6,499,356 | $ | 6,556,936 | ||||||||
Financing liabilities | $ | 175,111 | $ | 175,111 | $ | 174,440 | $ | 174,440 |
Successor | ||||||||
Year Ended December 31, 2013 | Year Ended December 31, 2012 | |||||||
Balance at beginning of period | $ | 21,467 | $ | 21,559 | ||||
Unit redemptions | — | (92 | ) | |||||
Distributions to redeemable non-controlling interests | (1,288 | ) | (1,291 | ) | ||||
Preferred return | 1,288 | 1,291 | ||||||
Balance at end of period | $ | 21,467 | $ | 21,467 |
Year ending December 31, | ||||
2014 | $ | 823,803 | ||
2015 | 721,352 | |||
2016 | 600,528 | |||
2017 | 479,408 | |||
2018 | 371,683 | |||
Thereafter | 1,400,662 |
2011 | 2013 | |||||
Dividend yield | 0 | % | 0 | % | ||
Risk free interest rate | 0.9 | % | 0.2 | % | ||
Expected volatility | 80.0 | % | 35.0 | % | ||
Expected life | 5 years | 1.6 years |
Estimated Fair Value Per Class B Units at Grant Date | Total Estimated Value of Class B Units at Grant Date (in millions) | ||||||||||||||||||
Date of Grant | Number of Class B Units Granted (in millions) | Service Condition | Performance and Market Condition | Service Condition | Performance and Market Condition | ||||||||||||||
November 1, 2011 | 96.8 | $ | 0.450 | $ | 0.440 | $ | 21.8 | $ | 21.3 | ||||||||||
March 29, 2013 | 9.1 | $ | 0.445 | $ | 0.444 | $ | 2.0 | $ | 2.0 | ||||||||||
April 30, 2013 | 1.8 | $ | 0.445 | $ | 0.444 | $ | 0.4 | $ | 0.4 | ||||||||||
May 20, 2013 | 20.6 | $ | 0.289 | $ | 0.289 | $ | 3.0 | $ | 3.0 |
Date of Grant | Value of Class B Units at Grant Date (in millions) | Assumed Value at IPO (in millions) | |||||
March 29, 2013 | $ | 4.0 | $ | 6.4 | |||
April 30, 2013 | $ | 0.8 | $ | 1.3 | |||
May 20, 2013 | $ | 6.0 | $ | 7.7 |
Class B Units | Restricted Shares | Aggregate Intrinsic Value | ||||||||
Outstanding, June 28, 2011 | — | — | $ | — | ||||||
Vested | — | — | — | |||||||
Granted | 96,842 | — | 43,095 | |||||||
Forfeited | — | — | — | |||||||
Outstanding, December 31, 2011 | 96,842 | — | 43,095 | |||||||
Vested | — | — | — | |||||||
Granted | — | — | — | |||||||
Forfeited | — | — | — | |||||||
Outstanding, December 31, 2012 | 96,842 | — | 43,095 | |||||||
Vested | (41,990 | ) | — | (17,327 | ) | |||||
Granted | 31,474 | 10 | 10,990 | |||||||
Forfeited | (16,342 | ) | — | (7,272 | ) | |||||
Exchanged | (69,984 | ) | 2,072 | |||||||
Outstanding, December 31, 2013 | — | 2,082 | $ | 29,486 |
Successor | |||||||||||
Year Ended December 31, | Period from June 28, 2011 through December 31, | ||||||||||
2013 | 2012 | 2011 | |||||||||
Computation of Basic Earnings Per Unit: | |||||||||||
Loss from continuing operations | $ | (80,651 | ) | $ | (149,521 | ) | $ | (128,537 | ) | ||
Income attributable to non-controlling interests | (1,355 | ) | (1,306 | ) | (653 | ) | |||||
Distributions on unvested restricted units | (200 | ) | — | — | |||||||
Loss from continuing operations attributable to partnership common units | (82,206 | ) | (150,827 | ) | (129,190 | ) | |||||
Loss from discontinued operations, net of Series A interest | (41,677 | ) | (10,668 | ) | (5,762 | ) | |||||
Net loss attributable to the Operating Partnerships common units for basic earnings per unit | $ | (123,883 | ) | $ | (161,495 | ) | $ | (134,952 | ) | ||
Weighted average number of vested common units outstanding - basic | 250,109 | 238,834 | 238,834 | ||||||||
Basic Earnings Per Unit Attributable to the Operating Partnership's Common Units: | |||||||||||
Loss from continuing operations | $ | (0.33 | ) | $ | (0.63 | ) | $ | (0.54 | ) | ||
Loss from discontinued operations | (0.17 | ) | (0.04 | ) | (0.02 | ) | |||||
Net loss (1) | $ | (0.49 | ) | $ | (0.68 | ) | $ | (0.57 | ) | ||
Computation of Diluted Earnings Per Unit: | |||||||||||
Loss from continuing operations attributable to partnership common units | $ | (82,006 | ) | $ | (150,827 | ) | $ | (129,190 | ) | ||
Loss from discontinued operations, net of Series A interest | (41,677 | ) | (10,668 | ) | (5,762 | ) | |||||
Net loss attributable to the Operating Partnership's common units for diluted earnings per unit | $ | (123,683 | ) | $ | (161,495 | ) | $ | (134,952 | ) | ||
Weighted average common units outstanding - basic | 250,109 | 238,834 | 238,834 | ||||||||
Effect of dilutive securities: | |||||||||||
Equity awards | — | — | — | ||||||||
Weighted average common units outstanding - diluted | 250,109 | 238,834 | 238,834 | ||||||||
Diluted Earnings Per Unit Attributable to the Operating Partnership's Common Units: | |||||||||||
Loss from continuing operations | $ | (0.33 | ) | $ | (0.63 | ) | $ | (0.54 | ) | ||
Loss from discontinued operations | (0.17 | ) | (0.04 | ) | (0.02 | ) | |||||
Net loss (1) | $ | (0.49 | ) | $ | (0.68 | ) | $ | (0.57 | ) |
• | On January 15, 2014, the Operating Partnership completed a cash tender offer (the “Tender Offer”) pursuant to which the Operating Partnership purchased 55.1% of the securities (the “Notes”) listed in the table below for an aggregate principal amount of $57.7 million. The offer was made pursuant to requirements set forth in the indenture governing the Notes (the "Indenture"), which provided that holders of the Notes had the right to require the Operating Partnership to repurchase such Notes from holders for cash on January 15, 2014 (the "Payment Date"). |
Title of Security | Principal Amount Outstanding | Principal Amount Validly Tendered | ||||||||
7.97% Senior Unsecured Notes due August 14, 2026 | $ | 10,000 | $ | 7,138 | ||||||
7.65% Senior Unsecured Notes due November 2, 2026 | 25,000 | 15,362 | ||||||||
7.68% Senior Unsecured Notes due November 2, 2026 | 10,000 | 10,000 | ||||||||
7.68% Senior Unsecured Notes due November 2, 2026 | 9,602 | 4,467 | ||||||||
6.90% Senior Unsecured Notes due February 15, 2028 | 25,000 | 14,356 | ||||||||
6.90% Senior Unsecured Notes due February 15, 2028 | 25,000 | 6,327 | ||||||||
$ | 104,602 | $ | 57,650 |
• | On March 11, 2014, the Board of Directors approved grants of 625,750 restricted stock units (“RSUs”) in BPG to certain employees of the Operating Partnership, or at the election of certain employees, long-term incentive plan units (“LTIP Units”) in the Operating Partnership. The RSUs and LTIP Units were granted with certain performance, market and service conditions. The fair value of the RSUs and LTIP Units granted with market conditions will be recognized over the term of the award and the RSUs and LTIP Units granted with performance conditions will be recognized as the applicable performance and service conditions are met. Under the terms of the RSUs and LTIP Units, the holder can earn up to a maximum of 150% of the award based on the actual results of the performance and market conditions. |
• | On March 18, 2014, the Operating Partnership entered into a $600.0 million unsecured term loan facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, which will mature on March 18, |
• | Anchor Space Repositioning / Redevelopment Expertise - We have been a top redeveloper over the past decade, according to Chain Store Age magazine, having completed anchor space repositioning / redevelopment projects totaling approximately $1 billion since January 1, 2003. |
• | Expansive Retailer Relationships - We believe that given the scale of our asset base and our nationwide footprint, we have a competitive advantage in supporting the growth plans of the nation’s largest retailers. We believe that we are |
• | Fully-Integrated Operating Platform - We operate with a fully-integrated, comprehensive platform both leveraging our national presence and demonstrating our commitment to a regional and local presence. We provide our tenants with personalized service through our network of three regional offices in Atlanta, Chicago and Philadelphia, as well as via 12 leasing and property management satellite offices throughout the country. We believe that this strategy enables us to obtain critical market intelligence and to benefit from the regional and local expertise of our workforce. |
• | Experienced Management - Senior members of our management team are experienced real estate operators with deep industry expertise and retailer relationships and have an average of 26 years of experience in the real estate industry and an average tenure of 14 years with the Operating Partnership. |
• | As of December 31, 2013, we owned interests in 558 shopping centers, including 554 wholly owned shopping centers (the "Consolidated Portfolio") and four shopping centers held through unconsolidated joint ventures. The Consolidated Portfolio includes the 522 shopping centers in our "IPO Portfolio" and the 36 Non-Core Properties in which the Company had an ownership interest in as of December 31, 2013. |
• | Billed occupancy for the IPO Portfolio was 90.7% and 90.0% as of December 31, 2013 and 2012, respectively. Leased occupancy for the IPO Portfolio was 92.4% and 91.3% as of December 31, 2013 and 2012, respectively. |
• | During 2013, we executed 2,244 leases in our IPO Portfolio totaling 12.8 million square feet of GLA, including 787 new leases totaling 3.4 million square feet of GLA and 1,457 renewals totaling 9.4 million sq. ft. of GLA. The average ABR under the new leases increased 29.5% from the prior tenant’s ABR and increased 9.8% for both new and renewal leases on comparable space from the prior tenant’s ABR. The average ABR per leased square foot of these new leases in our IPO Portfolio is $13.69 and the average ABR per leased square foot of these new and renewal leases in our IPO Portfolio is $12.38. The cost per square foot for tenant improvements and leasing commissions for new leases was $12.58 and $2.98, respectively. The cost per square foot for tenant improvements and leasing commissions for renewal leases was $0.70 and $0.04, respectively. |
• | During 2012, we executed 2,273 leases in our Consolidated Portfolio totaling 12.8 million sq. ft. of GLA, including 715 new leases totaling 3.5 million sq. ft. of GLA and 1,558 renewals totaling 9.2 million sq. ft. The average ABR under the new leases increased 20.1% from the prior tenants' ABR and increased 6.2% for both new and renewal leases on comparable space from the prior tenants' ABR. The average ABR per leased sq. ft. of these new leases was $11.86 and the average ABR per leased sq. ft. of these new and renewal leases was $11.95. The cost per sq. ft. for tenant improvements and leasing commissions for new leases was $11.46 and $1.77, respectively. The cost per sq. ft. for tenant improvements and leasing commissions for renewal leases was $0.80 and $0.02, respectively. |
• | During the year ended December 31, 2013, in addition to the Acquired Properties, we acquired one retail building which was adjacent to one of our existing shopping centers for a purchase price of $5.1 million and the remaining 70% interest in a shopping center held through an unconsolidated joint venture for a net purchase price $18.7 million. |
• | During the year ended December 31, 2012, we acquired three retail buildings which were adjacent buildings at certain of our existing shopping centers, for approximately $5.5 million. In addition, we acquired the remaining 50% ownership interest in a 41.6 acre land parcel for a purchase price of $0.5 million. |
• | During the year ended December 31, 2013, we disposed of 18 shopping centers and three land parcels for aggregate proceeds of $59.0 million. |
• | During the year ended December 31, 2012, we disposed of 19 shopping centers, two retail buildings and one land parcel for aggregate proceeds of $50.6 million. |
Year ended December 31, | |||||||||||
2013 | 2012 | $ Change | |||||||||
Revenues | |||||||||||
Rental income | $ | 887,819 | $ | 851,654 | $ | 36,165 | |||||
Expense reimbursements | 242,939 | 225,848 | 17,091 | ||||||||
Other revenues | 16,135 | 11,233 | 4,902 | ||||||||
Total revenues | $ | 1,146,893 | $ | 1,088,735 | $ | 58,158 |
Year ended December 31, | |||||||||||
2013 | 2012 | $ Change | |||||||||
Operating expenses: | |||||||||||
Operating costs | $ | 116,566 | $ | 118,929 | $ | (2,363 | ) | ||||
Real estate taxes | 168,555 | 155,210 | 13,345 | ||||||||
Depreciation and amortization | 438,730 | 488,714 | (49,984 | ) | |||||||
Provision for doubtful accounts | 10,920 | 11,544 | (624 | ) | |||||||
Impairment of real estate assets | 1,531 | — | 1,531 | ||||||||
General and administrative | 121,079 | 88,931 | 32,148 | ||||||||
Total operating expenses | $ | 857,381 | $ | 863,328 | $ | (5,947 | ) |
Year ended December 31, | |||||||||||
2013 | 2012 | $ Change | |||||||||
Other income (expense) | |||||||||||
Dividends and interest | $ | 825 | $ | 1,125 | $ | (300 | ) | ||||
Interest expense | (343,311 | ) | (376,414 | ) | 33,103 | ||||||
Gain on sales of real estate assets and acquisition of joint venture interest | 2,223 | 501 | 1,722 | ||||||||
Gain (loss) on extinguishment of debt, net | (20,063 | ) | — | (20,063 | ) | ||||||
Other | (11,004 | ) | (513 | ) | (10,491 | ) | |||||
Total other income (expense) | $ | (371,330 | ) | $ | (375,301 | ) | $ | 3,971 |
Year ended December 31, | |||||||||||
2013 | 2012 | $ Change | |||||||||
Equity in income of unconsolidated joint ventures | $ | 1,167 | $ | 687 | $ | 480 | |||||
Impairment of investment in unconsolidated joint ventures | $ | — | $ | (314 | ) | $ | 314 |
Year ended December 31, | |||||||||||
2013 | 2012 | $ Change | |||||||||
Discontinued operations: | |||||||||||
Income (loss) from discontinued operations | $ | 3,504 | $ | (2,438 | ) | $ | 5,942 | ||||
Gain on disposition of operating properties | 3,392 | 5,369 | (1,977 | ) | |||||||
Impairment of real estate held for sale | (45,122 | ) | (13,599 | ) | (31,523 | ) | |||||
Loss from discontinued operations | $ | (38,226 | ) | $ | (10,668 | ) | $ | (27,558 | ) |
Successor | Predecessor | |||||||||||
Year Ended December 31, 2012 | Period from June 28, 2011 through December 31, 2011 | Period from January 1, 2011 through June 27, 2011 | ||||||||||
Revenue | ||||||||||||
Rental income | $ | 851,654 | $ | 429,365 | $ | 412,929 | ||||||
Expense reimbursements | 225,848 | 112,416 | 114,879 | |||||||||
Other revenue | 11,233 | 5,331 | 7,588 | |||||||||
Total revenues | $ | 1,088,735 | $ | 547,112 | $ | 535,396 |
Successor | Predecessor | |||||||||||
Year Ended December 31, 2012 | Period from June 28, 2011 through December 31, 2011 | Period from January 1, 2011 through June 27, 2011 | ||||||||||
Operating expenses | ||||||||||||
Operating costs | $ | 118,929 | $ | 59,461 | $ | 64,409 | ||||||
Real estate taxes | 155,210 | 77,487 | 76,763 | |||||||||
Depreciation and amortization | 488,714 | 283,763 | 168,690 | |||||||||
Provision for doubtful accounts | 11,544 | 8,465 | 10,348 | |||||||||
Acquisition related costs | — | — | 5,647 | |||||||||
General and administrative | 88,931 | 49,874 | 57,363 | |||||||||
Total operating expenses | $ | 863,328 | $ | 479,050 | $ | 383,220 |
Successor | Predecessor | |||||||||||
Year Ended December 31, 2012 | Period from June 28, 2011 through December 31, 2011 | Period from January 1, 2011 through June 27, 2011 | ||||||||||
Other income (expense) | ||||||||||||
Dividends and interest | $ | 1,125 | $ | 641 | $ | 815 | ||||||
Interest expense | (376,414 | ) | (199,221 | ) | (189,380 | ) | ||||||
Gain on sale of real estate | 501 | — | — | |||||||||
Gain (loss) on extinguishment of debt, net | — | 917 | — | |||||||||
Other | (513 | ) | 1,224 | (3,732 | ) | |||||||
Total other income (expense) | $ | (375,301 | ) | $ | (196,439 | ) | $ | (192,297 | ) |
Successor | Predecessor | |||||||||||
Year Ended December 31, 2012 | Period from June 28, 2011 through December 31, 2011 | Period from January 1, 2011 through June 27, 2011 | ||||||||||
Equity in income (loss) of unconsolidated joint ventures | $ | 687 | $ | (160 | ) | $ | (381 | ) | ||||
Impairment of investment in unconsolidated joint ventures | $ | (314 | ) | $ | — | $ | — |
Successor | Predecessor | |||||||||||
Year Ended December 31, 2012 | Period from June 28, 2011 through December 31, 2011 | Period from January 1, 2011 through June 27, 2011 | ||||||||||
Discontinued operations: | ||||||||||||
Income (loss) from discontinued operations | $ | (2,438 | ) | $ | (5,762 | ) | $ | 2,019 | ||||
Gain on disposition of operating properties | 5,369 | — | — | |||||||||
Impairment of real estate held for sale | (13,599 | ) | — | (8,608 | ) | |||||||
Loss from discontinued operations | $ | (10,668 | ) | $ | (5,762 | ) | $ | (6,589 | ) |
Twelve Months Ended | ||||||||||||||
12/31/13 | 12/31/12 | Change | ||||||||||||
Number of properties (a) | 479 | 479 | — | |||||||||||
Percent billed | 90.8% | 90.0% | 0.8% | |||||||||||
Percent leased | 92.6% | 91.3% | 1.3% | |||||||||||
Revenues | ||||||||||||||
Rental income | $ | 814,232 | $ | 790,046 | $ | 24,186 | ||||||||
Expense reimbursements | 241,328 | 227,919 | 13,409 | |||||||||||
Other revenues | 6,342 | 6,115 | 227 | |||||||||||
1,061,902 | 1,024,080 | 37,822 | ||||||||||||
Operating expenses | ||||||||||||||
Property operating costs | (116,923 | ) | (118,582 | ) | 1,659 | |||||||||
Real estate taxes | (167,393 | ) | (156,584 | ) | (10,809 | ) | ||||||||
Provisions for doubtful accounts | (10,902 | ) | (11,534 | ) | 632 | |||||||||
(295,218 | ) | (286,700 | ) | (8,518 | ) | |||||||||
Same property NOI | $ | 766,684 | $ | 737,380 | $ | 29,304 |
(a) | Arapahoe Crossings, L.P., in which we owned a 30% interest prior to our July 31, 2013 acquisition of the remaining 70%, is reflected in Same Property NOI as if we owned 100% for all of 2013 and 2012. |
Year Ended December 31, | |||||||
2013 | 2012 | ||||||
Net income (loss) attributable to Brixmor Operating Partnership LP | $ | (120,232 | ) | $ | (161,495 | ) | |
Adjustments: | |||||||
Revenue adjustments (1) | (76,100 | ) | (66,711 | ) | |||
Depreciation and amortization | 438,730 | 488,714 | |||||
Impairment of real estate assets | 1,531 | — | |||||
General and administrative | 121,079 | 88,931 | |||||
Total other expense | 371,330 | 375,301 | |||||
Equity in income of unconsolidated joint ventures | (1,167 | ) | (687 | ) | |||
Impairment of investment in unconsolidated joint venture | — | 314 | |||||
Pro rata share of Same Property NOI of unconsolidated joint ventures | 719 | 617 | |||||
Loss from discontinued operations | 38,226 | 10,668 | |||||
Net loss attributable to non-controlling interests | 1,355 | 1,306 | |||||
Non-same property NOI | (8,787 | ) | 422 | ||||
Same property NOI | $ | 766,684 | $ | 737,380 |
Twelve Months Ended | ||||||||||||||
12/31/2012 | 12/31/2011 | Change | ||||||||||||
Number of properties (a) | 479 | 479 | — | |||||||||||
Percent billed | 90.0 | % | 87.2 | % | 2.8% | |||||||||
Percent leased | 91.3 | % | 90.6 | % | 0.7% | |||||||||
Revenues | ||||||||||||||
Rental income | $ | 786,519 | $ | 767,801 | $ | 18,718 | ||||||||
Expense reimbursements | 226,614 | 220,876 | 5,738 | |||||||||||
Other revenues | 6,092 | 18,104 | (12,012 | ) | ||||||||||
1,019,225 | 1,006,781 | 12,444 | ||||||||||||
Operating expenses | ||||||||||||||
Property operating costs | (117,987 | ) | (125,044 | ) | 7,057 | |||||||||
Real estate taxes | (155,322 | ) | (154,982 | ) | (340 | ) | ||||||||
Provisions for doubtful accounts | (11,545 | ) | (18,993 | ) | 7,448 | |||||||||
(284,854 | ) | (299,019 | ) | 14,165 | ||||||||||
Same property NOI | $ | 734,371 | $ | 707,762 | $ | 26,609 |
(a) | Arapahoe Crossings, L.P., in which we owned a 30% interest prior to our July 31, 2013 acquisition of the remaining 70%, is reflected in Same Property NOI based on our 30% ownership interest 2012 and 2011. |
Year Ended December 31, | |||||||
2012 | 2011 | ||||||
Net income (loss) attributable to Brixmor Operating Partnership LP | $ | (161,495 | ) | $ | (182,795 | ) | |
Adjustments: | |||||||
Revenue adjustments (1) | (71,009 | ) | (79,928 | ) | |||
Depreciation and amortization | 488,714 | 452,453 | |||||
Acquisition related costs | — | 5,647 | |||||
General and administrative | 88,931 | 107,237 | |||||
Total other expense | 375,301 | 388,736 | |||||
Equity in income of unconsolidated joint ventures | (687 | ) | 541 | ||||
Impairment of investment in unconsolidated joint venture | 314 | — | |||||
Pro rata share of Same Property NOI of unconsolidated joint ventures | 1,906 | 1,905 | |||||
Loss from discontinued operations | 10,668 | 12,351 | |||||
Net loss attributable to non-controlling interests | 1,306 | 1,405 | |||||
Non-same property NOI | 422 | 210 | |||||
Same property NOI | $ | 734,371 | $ | 707,762 |
• | cash and cash equivalents; |
• | operating cash flow; |
• | available borrowings under our existing revolving credit facility; |
• | issuance of long-term debt; and |
• | asset sales. |
• | leasing costs and tenant improvements allowances; |
• | active anchor space repositioning/redevelopments; |
• | recurring maintenance capital expenditures; |
• | debt repayment requirements; |
• | corporate and administrative costs; and |
• | distribution payments. |
• | major active redevelopments, renovation or expansion programs at individual properties; |
• | acquisitions; and |
• | debt maturities. |
Successor | Predecessor | ||||||||||||||||
Year Ended December 31, | Period from June 28, 2011 through December 31, 2011 | Period from January 1, 2011 through June 27, 2011 | |||||||||||||||
2013 | 2012 | ||||||||||||||||
Cash flows provided by operating activities | $ | 331,988 | $ | 269,509 | $ | 97,996 | $ | 117,093 | |||||||||
Cash flows used in investing activities | $ | (86,361 | ) | $ | (118,499 | ) | $ | (1,387,031 | ) | $ | (18,842 | ) | |||||
Cash flows provided by (used in) financing activities | $ | (230,102 | ) | $ | (159,147 | ) | $ | 1,394,653 | $ | (354,573 | ) |
Contractual Obligations | Payment due by period | |||||||||||||||||||
(in thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Debt (1) | $ | 5,901,978 | $ | 327,553 | $ | 2,315,474 | $ | 2,168,825 | $ | 1,090,126 | ||||||||||
Interest payments (2) | 1,128,401 | 287,850 | 451,225 | 227,880 | 161,446 | |||||||||||||||
Financing liabilities | 172,690 | 891 | 132,917 | 2,199 | 36,683 | |||||||||||||||
Operating leases | 134,201 | 8,616 | 16,712 | 15,274 | 93,599 | |||||||||||||||
Total | $ | 7,337,270 | $ | 624,910 | $ | 2,916,328 | $ | 2,414,178 | $ | 1,381,854 | ||||||||||
(1) | Debt includes scheduled amortization and scheduled maturities for mortgages and secured loans, credit facilities and notes payable. |
(2) | We incur variable rate interest on $271.5 million and $600.0 million of debt related to the Unsecured Credit Facility and Term Loan, respectively. The margin associated with Unsecured Credit Facility borrowings is based on a total leverage based grid and ranges from 0.40% to 1.00%, for base rate loans, and 1.40% to 2.00%, for LIBOR rate loans. The margin associated with the Term Loan is based on a total leverage based grid and ranges from 0.35% to 0.75%, for base rate loans, and 1.35% to 1.75% for LIBOR rate loans. |
Successor | Predecessor | |||||||||||||||
Year Ended December 31, | Period from June 28, 2011 through December 31, 2011 | Period from January 1, 2011 through June 27, 2011 | ||||||||||||||
2013 | 2012 | |||||||||||||||
Net income (loss) | $ | (118,877 | ) | $ | (160,189 | ) | $ | (134,299 | ) | $ | (47,091 | ) | ||||
Gain on disposition of operating properties | (3,392 | ) | (5,369 | ) | — | — | ||||||||||
Gain on disposition of unconsolidated joint ventures | — | (24 | ) | 30 | — | |||||||||||
Depreciation and amortization-real estate related-continuing operations | 436,730 | 485,962 | 281,817 | 166,529 | ||||||||||||
Depreciation and amortization-real estate related-discontinued operations | 11,504 | 21,720 | 14,936 | 10,683 | ||||||||||||
Depreciation and amortization-real estate related-unconsolidated joint ventures | 180 | 817 | 476 | 908 | ||||||||||||
Impairment of operating properties | 43,582 | 13,599 | — | 8,608 | ||||||||||||
Impairment of unconsolidated joint ventures | — | 314 | — | — | ||||||||||||
FFO | 369,727 | 356,830 | 162,960 | 139,637 | ||||||||||||
Adjustments attributable to Series A interest and non-controlling interests not convertible into partnership common units | (7,155 | ) | (1,306 | ) | (653 | ) | (752 | ) | ||||||||
FFO attributable to partners | $ | 362,572 | $ | 355,524 | $ | 162,307 | $ | 138,885 |
Successor | Predecessor | |||||||||||||||
Year Ended December 31, | Period from June 28, 2011 through December 31, 2011 | Period from January 1, 2011 through June 27, 2011 | ||||||||||||||
2013 | 2012 | |||||||||||||||
Net income (loss) | $ | (118,877 | ) | $ | (160,189 | ) | $ | (134,299 | ) | $ | (47,091 | ) | ||||
Interest expense-continuing operations | 343,311 | 376,414 | 199,221 | 189,380 | ||||||||||||
Interest expense-discontinued operations | 6,564 | 10,929 | 6,216 | 2,991 | ||||||||||||
Interest expense-unconsolidated joint ventures | 651 | 1,589 | 852 | — | ||||||||||||
Federal and state taxes | 2,843 | 2,171 | 3,414 | 10,590 | ||||||||||||
Depreciation and amortization-continuing operations | 438,730 | 488,714 | 283,763 | 168,690 | ||||||||||||
Depreciation and amortization-discontinued operations | 11,504 | 21,720 | 14,936 | 10,683 | ||||||||||||
Depreciation and amortization-unconsolidated joint ventures | 180 | 817 | 476 | 908 | ||||||||||||
EBITDA | $ | 684,906 | $ | 742,165 | $ | 374,579 | $ | 336,151 | ||||||||
Acquisition-related costs | — | — | — | 5,647 | ||||||||||||
Gain on disposition of operating properties | (3,392 | ) | (5,369 | ) | — | — | ||||||||||
Gain from development/land sales and acquisition of joint venture interests | (2,223 | ) | (501 | ) | — | — | ||||||||||
Gain on disposition of unconsolidated joint ventures | — | (24 | ) | 30 | — | |||||||||||
Loss (gain) on extinguishment of debt, net | 17,769 | — | (917 | ) | — | |||||||||||
Impairment of operating properties and land sales | 1,531 | — | — | — | ||||||||||||
Impairment of real estate held for sale | 45,122 | 13,599 | — | 8,608 | ||||||||||||
Impairments of real estate joint ventures | — | 314 | — | — | ||||||||||||
Adjustments to Series A interest and non-controlling interest not convertible into partnership common units | (4,059 | ) | (1,306 | ) | (653 | ) | (752 | ) | ||||||||
Total adjustments | 54,748 | 6,713 | (1,540 | ) | 13,503 | |||||||||||
Adjusted EBITDA | $ | 739,654 | $ | 748,878 | $ | 373,039 | $ | 349,654 |
Building and building and land improvements | 20 - 40 years |
Furniture, fixtures, and equipment | 5 - 10 years |
Tenant improvements | The shorter of the term of the related lease or useful life |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Brixmor Operating Partnership LP and Subsidiaries For The Nine Months Ended September 30, 2014 and 2013 |
Page | ||
CONDENSED CONSOLIDATED STATEMENTS | ||
Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013 | ||
Condensed Consolidated Statements of Operations for the nine months ended September 30, 2014 and 2013 | ||
Condensed Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30, 2014 and 2013 | ||
Condensed Consolidated Statement of Changes in Capital for the nine months ended September 30, 2014 and 2013 | ||
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013 | ||
Notes to Combined Consolidated Financial Statements | ||
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited, in thousands, except unit information) | |||||||
September 30, 2014 | December 31, 2013 | ||||||
Assets | |||||||
Real estate | |||||||
Land | $ | 1,998,837 | $ | 2,055,802 | |||
Buildings and improvements | 8,751,020 | 8,781,926 | |||||
10,749,857 | 10,837,728 | ||||||
Accumulated depreciation and amortization | (1,452,732 | ) | (1,190,170 | ) | |||
Real estate, net | 9,297,125 | 9,647,558 | |||||
Investments in and advances to unconsolidated joint ventures | 5,216 | 9,205 | |||||
Cash and cash equivalents | 92,607 | 113,006 | |||||
Restricted cash | 56,240 | 75,457 | |||||
Marketable securities | 21,020 | 21,907 | |||||
Receivables, net | 170,615 | 178,505 | |||||
Deferred charges and prepaid expenses, net | 118,933 | 105,522 | |||||
Other assets | 13,298 | 19,650 | |||||
Total assets | $ | 9,775,054 | $ | 10,170,810 | |||
Liabilities | |||||||
Debt obligations, net | $ | 5,933,358 | $ | 5,981,289 | |||
Financing liabilities, net | 121,470 | 175,111 | |||||
Accounts payable, accrued expenses and other liabilities | 677,699 | 709,519 | |||||
Total liabilities | 6,732,527 | 6,865,919 | |||||
Redeemable non-controlling interests | 21,467 | 21,467 | |||||
Commitments and contingencies | — | — | |||||
Capital | |||||||
Partnership common units; 304,230,758 units outstanding | 3,024,914 | 3,108,398 | |||||
Series A interest | — | 180,386 | |||||
Accumulated other comprehensive loss | (3,854 | ) | (6,797 | ) | |||
Total partners' capital | 3,021,060 | 3,281,987 | |||||
Non-controlling interests | — | 1,437 | |||||
Total capital | 3,021,060 | 3,283,424 | |||||
Total liabilities and capital | $ | 9,775,054 | $ | 10,170,810 | |||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(Unaudited, in thousands) | |||||||
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
Revenues | |||||||
Rental income | $ | 718,240 | $ | 654,079 | |||
Expense reimbursements | 197,835 | 179,534 | |||||
Other revenues | 6,290 | 8,006 | |||||
Total revenues | 922,365 | 841,619 | |||||
Operating expenses | |||||||
Operating costs | 95,595 | 85,542 | |||||
Real estate taxes | 132,650 | 124,711 | |||||
Depreciation and amortization | 334,084 | 328,878 | |||||
Provision for doubtful accounts | 8,636 | 7,956 | |||||
Impairment of real estate assets | — | 1,531 | |||||
General and administrative | 59,221 | 65,386 | |||||
Total operating expenses | 630,186 | 614,004 | |||||
Other income (expense) | |||||||
Dividends and interest | 431 | 621 | |||||
Interest expense | (199,464 | ) | (270,845 | ) | |||
Gain on sale of real estate assets and acquisition of joint venture interest | 378 | 2,223 | |||||
Gain (loss) on extinguishment of debt, net | (2,573 | ) | (17,783 | ) | |||
Other | (5,335 | ) | (8,098 | ) | |||
Total other income (expense) | (206,563 | ) | (293,882 | ) | |||
Income (loss) before equity in income of unconsolidated joint ventures | 85,616 | (66,267 | ) | ||||
Equity in income of unconsolidated joint ventures | 248 | 1,001 | |||||
Gain on disposition of investments in unconsolidated joint ventures | 1,820 | — | |||||
Income (loss) from continuing operations | 87,684 | (65,266 | ) | ||||
Discontinued operations | |||||||
Income (loss) from discontinued operations | 4,787 | (892 | ) | ||||
Gain on disposition of operating properties | 14,426 | 2,631 | |||||
Impairment of real estate held for sale | — | (43,323 | ) | ||||
Income (loss) from discontinued operations | 19,213 | (41,584 | ) | ||||
Net income (loss) | 106,897 | (106,850 | ) | ||||
Non-controlling interests | |||||||
Net income attributable to non-controlling interests | (966 | ) | (1,018 | ) | |||
Net income (loss) attributable to Brixmor Operating Partnership LP | $ | 105,931 | $ | (107,868 | ) | ||
Net loss attributable to: | |||||||
Series A interest | $ | 21,014 | $ | — | |||
Partnership common units | 84,917 | (107,868 | ) | ||||
Net income (loss) attributable to Brixmor Operating Partnership LP | $ | 105,931 | $ | (107,868 | ) | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||
(Unaudited, in thousands) | |||||||
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
Net income (loss) | $ | 106,897 | $ | (106,850 | ) | ||
Other comprehensive income (loss) | |||||||
Unrealized gain (loss) on interest rate hedges | 2,941 | (7,720 | ) | ||||
Unrealized gain (loss) on marketable securities | 2 | 38 | |||||
Comprehensive income (loss) | 109,840 | (114,532 | ) | ||||
Comprehensive income attributable to non-controlling interests | (966 | ) | (1,018 | ) | |||
Comprehensive income (loss) attributable to Brixmor Operating Partnership LP | $ | 108,874 | $ | (115,550 | ) | ||
Comprehensive income (loss) attributable to: | |||||||
Series A interest | 21,014 | — | |||||
Partnership common units | 87,860 | (115,550 | ) | ||||
Comprehensive income (loss) attributable to Brixmor Operating Partnership LP | $ | 108,874 | $ | (115,550 | ) | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES | |||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL | |||||||||||||||||||
(Unaudited, in thousands) | |||||||||||||||||||
Partnership Common Units | Series A Interest | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests | Total | |||||||||||||||
Beginning balance, January 1, 2014 | $ | 3,108,398 | $ | 180,386 | $ | (6,797 | ) | $ | 1,437 | $ | 3,283,424 | ||||||||
Distribution to partners | (182,079 | ) | — | — | — | (182,079 | ) | ||||||||||||
Redemption of Series A | 6,222 | (201,400 | ) | — | — | (195,178 | ) | ||||||||||||
Equity based compensation expense | 7,019 | — | — | — | 7,019 | ||||||||||||||
Acquisition of non-controlling interests | 437 | — | — | (1,437 | ) | (1,000 | ) | ||||||||||||
Change in value of credit swap liability | — | — | 2,941 | — | 2,941 | ||||||||||||||
Unrealized gain on marketable securities | — | — | 2 | — | 2 | ||||||||||||||
Net income | 84,917 | 21,014 | — | — | 105,931 | ||||||||||||||
Ending balance, September 30, 2014 | $ | 3,024,914 | $ | — | $ | (3,854 | ) | $ | — | $ | 3,021,060 | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited, in thousands) | |||||||
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
Operating activities: | |||||||
Net income (loss) | $ | 106,897 | $ | (106,850 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 334,515 | 338,379 | |||||
Debt premium and discount amortization | (15,524 | ) | (16,619 | ) | |||
Deferred financing cost amortization | 6,708 | 8,703 | |||||
Above- and below-market lease intangible amortization | (35,090 | ) | (39,051 | ) | |||
Provisions of impairment | — | 44,854 | |||||
Gain on disposition of operating properties, disposition of investments in unconsolidated joint ventures and acquisition of joint venture interest | (16,624 | ) | (4,854 | ) | |||
Equity based compensation | 7,019 | 3,661 | |||||
Other | (214 | ) | (1,002 | ) | |||
(Gain) loss on extinguishment of debt, net | (4,245 | ) | 17,788 | ||||
Changes in operating assets and liabilities: | |||||||
Restricted cash | 11,007 | 5,244 | |||||
Receivables | 6,513 | (21,495 | ) | ||||
Deferred charges and prepaid expenses | (29,787 | ) | (25,288 | ) | |||
Other assets | 357 | (1,820 | ) | ||||
Accounts payable, accrued expenses and other liabilities | 760 | 12,978 | |||||
Net cash provided by operating activities | 372,292 | 214,628 | |||||
Investing activities: | |||||||
Improvements to and investments in real estate assets | (146,499 | ) | (104,627 | ) | |||
Acquisitions of real estate assets | — | (23,792 | ) | ||||
Proceeds from sales of real estate assets | 2,778 | 44,866 | |||||
Distributions from unconsolidated joint ventures | 187 | 455 | |||||
Contributions to unconsolidated joint ventures | — | (3 | ) | ||||
Change in restricted cash attributable to investing activities | 7,328 | 4,231 | |||||
Purchase of marketable securities | (20,250 | ) | (10,662 | ) | |||
Proceeds from sale of marketable securities | 21,414 | 12,609 | |||||
Net cash used in investing activities | (135,042 | ) | (76,923 | ) | |||
Financing activities: | |||||||
Repayment of debt obligations and financing liabilities | (827,460 | ) | (2,479,830 | ) | |||
Proceeds from debt obligations | — | 57,000 | |||||
Repayment of borrowings under unsecured revolving credit facility | (675,047 | ) | — | ||||
Proceeds from borrowings under unsecured credit facility | 826,343 | 2,379,108 | |||||
Proceeds from unsecured term loan | 600,000 | — | |||||
Deferred financing costs | (2,995 | ) | (21,223 | ) | |||
Partner distributions | (177,524 | ) | (33,362 | ) | |||
Distributions to non-controlling interests and other | (966 | ) | (1,004 | ) | |||
Net cash used in financing activities | (257,649 | ) | (99,311 | ) | |||
Change in cash and cash equivalents | (20,399 | ) | 38,394 | ||||
Cash and cash equivalents at beginning of period | 113,006 | 97,481 | |||||
Cash and cash equivalents at end of period | $ | 92,607 | $ | 135,875 | |||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
Discontinued operations: | |||||||
Revenues | $ | 267 | $ | 28,004 | |||
Operating expenses | (1,293 | ) | (21,992 | ) | |||
Other income (expense), net | 5,813 | (6,904 | ) | ||||
Income (loss) from discontinued operating properties | 4,787 | (892 | ) | ||||
Gain on disposition of operating properties | 14,426 | 2,631 | |||||
Impairment on real estate held for sale | — | (43,323 | ) | ||||
Income (loss) from discontinued operations | $ | 19,213 | $ | (41,584 | ) |
September 30, 2014 | December 31, 2013 | ||||||
Land | $ | 1,998,837 | $ | 2,055,802 | |||
Buildings and improvements: | |||||||
Building | 7,327,482 | 7,436,072 | |||||
Building and tenant improvements | 500,712 | 373,907 | |||||
Other rental property (1) | 922,826 | 971,947 | |||||
10,749,857 | 10,837,728 | ||||||
Accumulated depreciation and amortization | (1,452,732 | ) | (1,190,170 | ) | |||
Total | $ | 9,297,125 | $ | 9,647,558 |
(1) | At September 30, 2014 and December 31, 2013, Other rental property consisted of intangible assets including: (i) $838.0 million and $881.9 million, respectively, of in-place lease value, (ii) $84.8 million and $90.0 million, respectively, of above-market leases, and (iii) $526.3 million and $462.5 million, respectively, of accumulated amortization. These intangible assets are amortized over the term of each related lease. |
Year ending December 31, | Estimated net amortization expense | |||
2014 (remaining three months) | $ | 15,859 | ||
2015 | 45,828 | |||
2016 | 22,034 | |||
2017 | 9,804 | |||
2018 | 3,655 |
Number of Instruments | Notional Amount | ||||||
Interest Rate Swaps | 5 | $ | 1,500,000 |
Fair Value of Derivative Instruments | ||||||||
Interest rate swaps classified as: | September 30, 2014 | December 31, 2013 | ||||||
Gross derivative assets | $ | — | $ | — | ||||
Gross derivative liabilities | (3,854 | ) | (6,795 | ) | ||||
Net derivative liability | $ | (3,854 | ) | $ | (6,795 | ) |
Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps and Caps) | Nine Months Ended September 30, 2014 | |||
Amount of gain (loss) recognized in OCI on derivative | $ | (4,531 | ) | |
Amount of loss reclassified from accumulated OCI into interest expense | $ | (7,472 | ) |
Number of Instruments | Notional Amount | ||||||
Interest Rate Caps | 4 | $ | 521,105 |
Carrying Value as of | ||||||||||||
September 30, 2014 | December 31, 2013 | Stated Interest Rates | Scheduled Maturity Date | |||||||||
Mortgage and secured loans(1) | ||||||||||||
Fixed rate mortgage and secured loans(2) | $ | 3,203,987 | $ | 3,444,578 | 4.90% - 8.00% | 2015 – 2021 | ||||||
Variable rate mortgage and secured loans | — | 483,604 | N/A | N/A | ||||||||
Total mortgage and secured loans | 3,203,987 | 3,928,182 | ||||||||||
Net unamortized premium | 73,333 | 93,077 | ||||||||||
Total mortgage and secured loans, net | $ | 3,277,320 | $ | 4,021,259 | ||||||||
Notes payables | ||||||||||||
Unsecured notes(3)(4) | $ | 293,657 | $ | 353,617 | 5.25% - 7.97% | 2015 - 2029 | ||||||
Net unamortized discount | (9,094 | ) | (13,766 | ) | ||||||||
Total notes payable, net | $ | 284,563 | $ | 339,851 | ||||||||
Unsecured Credit Facility(5) | $ | 1,771,475 | $ | 1,620,179 | 1.69% | 2017 – 2018 | ||||||
Unsecured Term Loan | 600,000 | — | 1.59% | 2019 | ||||||||
Total debt obligations, net | $ | 5,933,358 | $ | 5,981,289 |
(1) | The Operating Partnership's mortgages and secured loans are collateralized by certain properties and the equity interests of certain subsidiaries. These properties had a carrying value as of September 30, 2014 of approximately $4.1 billion. |
(2) | The weighted average interest rate on the Operating Partnership’s fixed rate mortgage and secured loans was 5.95% as of September 30, 2014. |
(3) | The weighted average interest rate on the Operating Partnership’s unsecured notes was 5.75% as of September 30, 2014. |
(4) | The Operating Partnership had a one-time put repurchase right to certain unsecured notes that required the Operating Partnership to offer to repurchase the notes if tendered by holders (but did not require the holders to tender) for an amount equal to the principal amount plus accrued and unpaid interest on January 15, 2014. In January 2014, $57.7 million of these notes was tendered to, and repurchased by the Operating Partnership. The Operating Partnership also repaid an additional $2.2 million of the notes in separate transactions during the nine months ended September 30, 2014. |
(5) | The Unsecured Credit Facility consists of a $1.25 billion revolving credit facility and a $1.5 billion term loan facility. The Operating Partnership has in place five forward starting interest rate swap agreements that convert the floating interest rate on the $1.5 billion term loan facility to a fixed, combined interest rate of 0.844% plus an interest spread of 150 basis points. |
Year ending December 31, | ||||
2014 (remaining three months) | $ | 8,392 | ||
2015 | 726,304 | |||
2016 | 1,258,881 | |||
2017 | 622,233 | |||
2018 | 1,520,660 | |||
Thereafter | 1,732,649 | |||
Total debt maturities | 5,869,119 | |||
Net unamortized premiums on mortgages | 73,333 | |||
Net unamortized discount on notes | (9,094 | ) | ||
Total debt obligations | $ | 5,933,358 |
Carrying Value as of | ||||||||||||
September 30, 2014 | December 31, 2013 | Stated Interest Rates | Scheduled Maturity Date | |||||||||
Financing Liabilities | ||||||||||||
Inland preferred interest (1) | $ | 121,470 | $ | 130,966 | 11.00% | 2015 | ||||||
Capital leases (2) | — | 41,723 | N/A | N/A | ||||||||
Total financing liabilities | 121,470 | 172,689 | ||||||||||
Net unamortized premium | — | 2,422 | ||||||||||
Total financing liabilities, net | $ | 121,470 | $ | 175,111 |
(1) | On December 6, 2010, the Operating Partnership formed a real estate venture with Inland American CP Investment, LLC (“Inland”). The Operating Partnership contributed 25 shopping centers with a fair value of approximately $471.0 million and Inland contributed cash of $121.5 million, resulting in Inland receiving a 70% ownership interest with a cumulative preferential share of cash flow generated by the shopping centers at an 11% stated return. The Operating Partnership received a 30% ownership interest, subordinated to Inland’s preferred interest. Due to the venture agreement providing Inland with the right to put its interest to the Operating Partnership for an amount of cash equal to the amount it contributed plus accrued interest beginning December 6, 2015, the Operating Partnership consolidates the real estate venture under the financing method which requires the amount Inland contributed to be reflected as a liability. The venture agreement also provided the Operating Partnership with the right to purchase Inland’s interest, beginning December 6, 2014, for an amount of cash determined on the same basis as described above. In October 2014, the Operating Partnership exercised its right to acquire Inland's interest and expects the transaction to close in December 2014. |
(2) | During the nine months ended September 30, 2014, the Operating Partnership exercised its option to purchase the underlying assets subject to the capital leases. |
September 30, 2014 | December 31, 2013 | |||||||||||||||
Carrying Amounts | Fair Value | Carrying Amounts | Fair Value | |||||||||||||
Mortgage and secured loans payable | $ | 3,277,320 | $ | 3,448,809 | $ | 4,021,259 | $ | 4,179,640 | ||||||||
Notes payable | 284,563 | 320,238 | 339,851 | 371,393 | ||||||||||||
Unsecured credit facility and term loan | 2,371,475 | 2,371,475 | 1,620,179 | 1,620,179 | ||||||||||||
Total debt obligations | $ | 5,933,358 | $ | 6,140,522 | $ | 5,981,289 | $ | 6,171,212 | ||||||||
Financing liabilities | $ | 121,470 | $ | 121,470 | $ | 175,111 | $ | 175,111 |
Nine Months Ended September 30, 2014 | Year Ended December 31, 2013 | |||||||
Balance at beginning of period | $ | 21,467 | $ | 21,467 | ||||
Distributions to redeemable non-controlling interests | (966 | ) | (1,288 | ) | ||||
Preferred return | 966 | 1,288 | ||||||
Balance at end of period | $ | 21,467 | $ | 21,467 |
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
Computation of Basic Earnings Per Unit: | |||||||
Income (loss) from continuing operations | $ | 87,684 | $ | (65,266 | ) | ||
Income attributable to non-controlling interests | (2,786 | ) | (1,018 | ) | |||
Distributions on unvested restricted units | (805 | ) | — | ||||
Income (loss) from continuing operations attributable to partnership common units | 84,093 | (66,284 | ) | ||||
Income (loss) from discontinued operations, net of Series A interest | 19 | (41,584 | ) | ||||
Net income (loss) attributable to the Operating Partnership's common units for basic earnings per unit | $ | 84,112 | $ | (107,868 | ) | ||
Weighted average number of vested common units outstanding - basic | 302,407 | 238,834 | |||||
Basic Earnings Per Unit Attributable to the Operating Partnership's Common Units: | |||||||
Income (loss) from continuing operations | $ | 0.28 | $ | (0.28 | ) | ||
Income (loss) from discontinued operations | — | (0.17 | ) | ||||
Net income (loss) | $ | 0.28 | $ | (0.45 | ) | ||
Computation of Diluted Earnings Per Unit: | |||||||
Income (loss) from continuing operations attributable to partnership common units | $ | 84,093 | $ | (66,284 | ) | ||
Income (loss) from discontinued operations, net of Series A interest | 19 | (41,584 | ) | ||||
Net income (loss) attributable to the Operating Partnership's common units for diluted earnings per unit | $ | 84,112 | $ | (107,868 | ) | ||
Weighted average common units outstanding - basic | 302,407 | 238,834 | |||||
Effect of dilutive securities: | |||||||
Equity awards | 1,139 | — | |||||
Weighted average common units outstanding - diluted | 303,546 | 238,834 | |||||
Diluted Earnings Per Unit Attributable to the Operating Partnership's Common Units: | |||||||
Income (loss) from continuing operations | $ | 0.28 | $ | (0.28 | ) | ||
Income (loss) from discontinued operations | — | (0.17 | ) | ||||
Net income (loss) | $ | 0.28 | $ | (0.45 | ) |
• | Anchor Space Repositioning / Redevelopment Expertise - We have been a top redeveloper over the past decade, according to Chain Store Age magazine, having completed anchor space repositioning / redevelopment projects totaling approximately $1 billion since January 1, 2003. |
• | Expansive Retailer Relationships - We believe that given the scale of our asset base and our nationwide footprint, we have a competitive advantage in supporting the growth plans of the nation’s largest retailers. We believe that we are the largest landlord by gross leasable area (“GLA”) to Kroger and TJX Companies, as well as a key landlord to all major grocers and most major retail category leaders. We believe that our strong relationships with leading retailers affords us insight into their strategies and priority access to their expansion plans, enabling us to efficiently provide these retailers with space in multiple locations. |
• | Fully-Integrated Operating Platform - We operate with a fully-integrated, comprehensive platform both leveraging our national presence and demonstrating our commitment to a regional and local presence. We provide our tenants with personalized service through our network of three regional offices in Atlanta, Chicago and Philadelphia, as well as via 12 leasing and property management satellite offices throughout the country. We believe that this strategy enables us to obtain critical market intelligence and to benefit from the regional and local expertise of our workforce. |
• | Experienced Management - Senior members of our management team are experienced real estate operators with deep industry expertise and retailer relationships and have an average of 26 years of experience in the real estate industry and an average tenure of 14 years with the Operating Partnership. |
• | As of September 30, 2014, we owned interests in 522 shopping centers (the “Total Portfolio”), including 521 wholly owned shopping centers and one shopping center held through an unconsolidated joint venture. |
• | Billed occupancy for the Total Portfolio was 90.8%, 90.7% and 90.0% as of September 30, 2014, December 31, 2013 and December 31, 2012, respectively. Leased occupancy for the Total Portfolio was 92.7%, 92.4% and 91.3% as of September 30, 2014, December 31, 2013 and December 31, 2012, respectively. |
• | During the nine months ended September 30, 2014, we executed 1,616 leases in our Total Portfolio totaling 10.0 million square feet of GLA, including 610 new leases totaling 2.9 million square feet of GLA and 1,006 renewals totaling 7.1 million square feet of GLA. The ABR under the new leases increased 27.7% from the prior tenant’s ABR and increased 12.2% for both new and renewal leases on comparable space from the ABR under the prior leases. The average ABR per leased square foot of these new leases in our Total Portfolio is $13.46 and the average ABR per leased square foot of these new and renewal leases in our Total Portfolio is $12.42. The cost per square foot for tenant improvements and leasing commissions for new leases was $16.17 and $2.65, respectively. The cost per square foot for tenant improvements and leasing commissions for renewal leases was $0.82 and $0.03, respectively. |
• | During 2013, we executed 2,244 leases in our Total Portfolio totaling 12.8 million square feet of GLA, including 787 new leases totaling 3.4 million square feet of GLA and 1,457 renewals totaling 9.4 million sq. ft. of GLA. The average ABR under the new leases increased 29.5% from the prior tenant’s ABR and increased 9.8% for both new and renewal leases on comparable space from the prior tenant’s ABR. The average ABR per leased square foot of these new leases in our IPO Portfolio is $13.69 and the average ABR per leased square foot of these new and renewal leases in our IPO Portfolio is $12.38. The cost per square foot for tenant improvements and leasing commissions for new leases was $12.58 and $2.98, respectively. The cost per square foot for tenant improvements and leasing commissions for renewal leases was $0.70 and $0.04, respectively. |
• | During 2012, we executed 2,273 leases in our Consolidated Portfolio totaling 12.8 million sq. ft. of GLA, including 715 new leases totaling 3.5 million sq. ft. of GLA and 1,558 renewals totaling 9.2 million sq. ft. The average ABR under the new leases increased 20.1% from the prior tenants' ABR and increased 6.2% for both new and renewal leases on comparable space from the prior tenants' ABR. The average ABR per leased sq. ft. of these new leases was $11.86 and the average ABR per leased sq. ft. of these new and renewal leases was $11.95. The cost per sq. ft. for tenant improvements and leasing commissions for new leases was $11.46 and $1.77, respectively. The cost per sq. ft. for tenant improvements and leasing commissions for renewal leases was $0.80 and $0.02, respectively. |
• | In connection with the BPG's IPO, the Operating Partnership created a separate series of interest in the Operating Partnership that allocated to certain funds affiliated with The Blackstone Group L.P. and Centerbridge Partners, L.P. (owners of the Operating Partnership prior to BPG's IPO) (the “pre-IPO owners”) all of the economic consequences of ownership of the Operating Partnership's interest in certain properties that the Operating Partnership had historically held in its portfolio (the “Non-Core Properties”). During the nine months ended September 30, 2014, we transferred our ownership interests in 35 Non Core-Properties to the pre-IPO owners. The 35 Non-Core Properties distributed to the pre-IPO owners had a carrying value of $179.0 million and a fair value of $195.2 million, resulting in a gain of $16.2 million. The remaining Non-Core Property was transferred to the lender in satisfaction of the property's mortgage balance. In addition, we sold a building in one of our shopping centers for net proceeds of $2.8 million. |
Nine months ended September 30, | |||||||||||
2014 | 2013 | $ Change | |||||||||
Revenues | |||||||||||
Rental income | $ | 718,240 | $ | 654,079 | $ | 64,161 | |||||
Expense reimbursements | 197,835 | 179,534 | 18,301 | ||||||||
Other revenues | 6,290 | 8,006 | (1,716 | ) | |||||||
Total revenues | $ | 922,365 | $ | 841,619 | $ | 80,746 |
Nine months ended September 30, | |||||||||||
2014 | 2013 | $ Change | |||||||||
Operating expenses | |||||||||||
Operating costs | $ | 95,595 | $ | 85,542 | $ | 10,053 | |||||
Real estate taxes | 132,650 | 124,711 | 7,939 | ||||||||
Depreciation and amortization | 334,084 | 328,878 | 5,206 | ||||||||
Provision for doubtful accounts | 8,636 | 7,956 | 680 | ||||||||
Impairment of real estate assets | — | 1,531 | (1,531 | ) | |||||||
General and administrative | 59,221 | 65,386 | (6,165 | ) | |||||||
Total operating expenses | $ | 630,186 | $ | 614,004 | $ | 16,182 |
Nine months ended September 30, | |||||||||||
2014 | 2013 | $ Change | |||||||||
Other income (expense) | |||||||||||
Dividends and interest | $ | 431 | $ | 621 | $ | (190 | ) | ||||
Interest expense | (199,464 | ) | (270,845 | ) | 71,381 | ||||||
Gain on sale of real estate assets | 378 | 2,223 | (1,845 | ) | |||||||
Gain (loss) on extinguishment of debt, net | (2,573 | ) | (17,783 | ) | 15,210 | ||||||
Other | (5,335 | ) | (8,098 | ) | 2,763 | ||||||
Total other income (expense) | $ | (206,563 | ) | $ | (293,882 | ) | $ | 87,319 |
Nine months ended September 30, | |||||||||||
2014 | 2013 | $ Change | |||||||||
Equity in income of unconsolidated joint ventures | $ | 248 | $ | 1,001 | $ | (753 | ) | ||||
Gain on disposal of investments in unconsolidated joint ventures | $ | 1,820 | $ | — | $ | 1,820 |
Nine months ended September 30, | |||||||||||
2014 | 2013 | $ Change | |||||||||
Discontinued operations | |||||||||||
Income (loss) from discontinued operations | $ | 4,787 | $ | (892 | ) | $ | 5,679 | ||||
Gain on disposition of operating properties | 14,426 | 2,631 | 11,795 | ||||||||
Impairment of real estate held for sale | — | (43,323 | ) | 43,323 | |||||||
Income (loss) from discontinued operations | $ | 19,213 | $ | (41,584 | ) | $ | 60,797 |
Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | Change | ||||||||||||
Number of properties | 479 | 479 | — | |||||||||||
Percent billed | 90.8 | % | 90.3 | % | 0.5% | |||||||||
Percent leased | 92.7 | % | 92.2 | % | 0.5% | |||||||||
Revenues | ||||||||||||||
Rental income | $ | 626,909 | $ | 607,368 | $ | 19,541 | ||||||||
Expense reimbursements | 187,465 | 180,861 | 6,604 | |||||||||||
Percentage rents | 4,481 | 4,968 | (487 | ) | ||||||||||
818,855 | 793,197 | 25,658 | ||||||||||||
Operating expenses | ||||||||||||||
Operating costs | (89,867 | ) | (87,114 | ) | (2,753 | ) | ||||||||
Real estate taxes | (126,177 | ) | (125,428 | ) | (749 | ) | ||||||||
Provisions for doubtful accounts | (8,174 | ) | (7,969 | ) | (205 | ) | ||||||||
(224,218 | ) | (220,511 | ) | (3,707 | ) | |||||||||
Same property NOI | $ | 594,637 | $ | 572,686 | $ | 21,951 |
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
Net income (loss) attributable to Brixmor Operating Partnership LP | $ | 105,931 | $ | (107,868 | ) | ||
Adjustments: | |||||||
Revenue adjustments (1) | (51,226 | ) | (51,621 | ) | |||
Depreciation and amortization | 334,084 | 328,878 | |||||
Impairment of real estate assets | — | 1,531 | |||||
General and administrative | 59,221 | 65,386 | |||||
Total other (income) expense | 206,563 | 293,882 | |||||
Equity in income of unconsolidated joint ventures | (248 | ) | (1,001 | ) | |||
Gain on disposition of investments in unconsolidated joint ventures | (1,820 | ) | — | ||||
Pro rata share of same property NOI of unconsolidated joint ventures | 547 | 545 | |||||
(Income) loss from discontinued operations | (19,213 | ) | 41,584 | ||||
Net income (loss) attributable to non-controlling interests | 966 | 1,018 | |||||
Non-same property NOI | (40,168 | ) | 352 | ||||
Same property NOI | $ | 594,637 | $ | 572,686 |
• | cash and cash equivalents; |
• | operating cash flow; |
• | available borrowings under our existing revolving credit facility; |
• | issuance of long-term debt; and |
• | asset sales. |
• | leasing costs and tenant improvements allowances; |
• | active anchor space repositioning/redevelopments; |
• | recurring maintenance capital expenditures; |
• | debt repayment requirements; |
• | corporate and administrative costs; and |
• | distribution payments. |
• | major active redevelopments, renovation or expansion programs at individual properties; |
• | acquisitions; and |
• | debt maturities. |
Nine Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
Cash flows provided by operating activities | $ | 372,292 | $ | 214,628 | ||||
Cash flows used in investing activities | $ | (135,042 | ) | $ | (76,923 | ) | ||
Cash flows provided by (used in) financing activities | $ | (257,649 | ) | $ | (99,311 | ) |
Contractual Obligations | Payment due by period | |||||||||||||||||||
(in thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Debt (1) | $ | 5,869,119 | $ | 8,392 | $ | 1,985,185 | $ | 2,142,893 | $ | 1,732,649 | ||||||||||
Interest payments (2) | 968,092 | 68,701 | 451,970 | 271,940 | 175,481 | |||||||||||||||
Financing liabilities | 121,470 | — | 121,470 | — | — | |||||||||||||||
Operating leases | 128,778 | 2,716 | 14,393 | 13,344 | 98,325 | |||||||||||||||
Total | $ | 7,087,459 | $ | 79,809 | $ | 2,573,018 | $ | 2,428,177 | $ | 2,006,455 | ||||||||||
(1) | Debt includes scheduled amortization and scheduled maturities for mortgages and secured loans, credit facilities and notes payable. |
(2) | We incur variable rate interest on $271.5 million and $600.0 million of debt related to the Unsecured Credit Facility and Term Loan, respectively. The margin associated with Unsecured Credit Facility borrowings is based on a total leverage based grid and ranges from 0.40% to 1.00%, for base rate loans, and 1.40% to 2.00%, for LIBOR rate loans. The margin on the Unsecured Credit Facility was 1.50% as of September 30, 2014. The margin associated with the Term Loan is based on a total leverage based grid and ranges from 0.35% to 0.75%, for base rate loans, and 1.35% to 1.75% for LIBOR rate loans. The margin on the Term Loan was 1.40% as of September 30, 2014. |
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
Net income (loss) | $ | 106,897 | $ | (106,850 | ) | ||
Gain on disposition of operating properties | (14,804 | ) | (2,631 | ) | |||
Gain on disposition of unconsolidated joint ventures | (1,820 | ) | — | ||||
Depreciation and amortization-real estate related-continuing operations | 332,286 | 327,370 | |||||
Depreciation and amortization-real estate related-discontinued operations | 431 | 9,467 | |||||
Depreciation and amortization-real estate related-unconsolidated joint ventures | 146 | 167 | |||||
Impairment of operating properties | — | 41,783 | |||||
Impairment of unconsolidated joint ventures | — | — | |||||
FFO | 423,136 | 269,306 | |||||
Adjustments attributable to Series A interest and non-controlling interests not convertible into partnership common units | (6,200 | ) | (1,018 | ) | |||
FFO attributable to partners | $ | 416,936 | $ | 268,288 |
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
Net income (loss) | $ | 106,897 | $ | (106,850 | ) | ||
Interest expense-continuing operations | 199,464 | 270,845 | |||||
Interest expense-discontinued operations | 259 | 6,160 | |||||
Interest expense-unconsolidated joint ventures | 130 | 589 | |||||
Federal and state taxes | 2,951 | 2,850 | |||||
Depreciation and amortization-continuing operations | 334,084 | 328,878 | |||||
Depreciation and amortization-discontinued operations | 431 | 9,467 | |||||
Depreciation and amortization-unconsolidated joint ventures | 146 | 167 | |||||
EBITDA | $ | 644,362 | $ | 512,106 | |||
Acquisition-related costs | — | — | |||||
Gain on disposition of operating properties | (14,804 | ) | (2,631 | ) | |||
Gain from development/land sales and acquisition of joint venture interests | — | (2,223 | ) | ||||
Gain on disposition of unconsolidated joint ventures | (1,820 | ) | — | ||||
Loss (gain) on extinguishment of debt, net | (3,501 | ) | 18,509 | ||||
Impairment of operating properties and land sales | — | 1,531 | |||||
Impairment of real estate held for sale | — | 43,323 | |||||
Impairments of real estate joint ventures | — | — | |||||
Adjustments to Series A interest and non-controlling interests not convertible into partnership common units | (381 | ) | (1,018 | ) | |||
Total adjustments | (20,506 | ) | 57,491 | ||||
Adjusted EBITDA | $ | 623,856 | $ | 569,597 | |||