Maryland | 1-10093 | 13-6908486 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
31500 Northwestern Highway, Suite 300, Farmington Hills, Michigan | 48334 | |||
(Address of principal executive offices) | (Zip Code) |
(d) | Exhibits |
99.1 | Press release of Ramco-Gershenson Properties Trust dated February 20, 2018. |
RAMCO-GERSHENSON PROPERTIES TRUST | |||
Date: | February 20, 2018 | By:/s/ GEOFFREY BEDROSIAN | |
Geoffrey Bedrosian | |||
Executive Vice President, Chief Financial Officer and Secretary |
99.1 |
• | Net income available to common shareholders of $0.24 per diluted share, compared to $0.07 per diluted share for the same period in 2016. |
• | Funds from Operations ("FFO") of $0.30 per diluted share, compared to $0.33 per diluted share for the same period in 2016. |
• | Operating Funds from Operations (“Operating FFO”) of $0.31 per diluted share, compared to $0.34 per diluted share for the same period in 2016. |
• | Generated same property NOI growth with redevelopment of 2.3% for the three months ended December 31, 2017. |
• | Sold $101.4 million of non-core shopping centers. |
• | Signed 40 comparable leases encompassing 206,502 square feet at a positive leasing spread of 8.9% with an annualized base rent ("ABR") of $14.47 per square feet, including seven new leases with an ABR of $18.06 per square feet and positive leasing spread of 16.8%. |
• | Increased ABR to $15.16 per square foot, excluding ground leases, compared to $14.20 for the same period in 2016. |
• | Generated same-center NOI growth with redevelopment of 2.4% for the twelve months ended December 31, 2017. |
• | Signed 186 comparable leases encompassing 1,073,197 square feet at a positive leasing spread of 8.8%, including 24 new leases with an ABR of $19.38 per square feet and positive leasing spread of 18.0%. |
• | Acquired one dynamic town center and one urban in-fill property for a purchase price totaling $168.3 million. |
• | Sold $225.7 million of non-core shopping centers. |
• | Completed approximately $15.5 million in redevelopment projects. |
• | Posted portfolio leased occupancy of 93.3%, compared to 94.4% for the same period in 2016, primarily the result of bankruptcy closures in 2017. |
• | Reduced Michigan rental exposure to 20.0% of total ABR. |
• | Net income available to common shareholders of $19.2 million, or $0.24 per diluted share, compared to $5.2 million, or $0.07 per diluted share for the same period in 2016. |
• | FFO of $26.5 million, or $0.30 per diluted share, compared to $29.1 million, or $0.33 per diluted share for the same period in 2016. |
• | Operating FFO of $27.7 million, or $0.31 per diluted share, compared to $29.5 million or $0.34 per diluted share for the same period in 2016. |
• | Net income available to common shareholders of $62.4 million, or $0.78 per diluted share, compared to $53.0 million, or $0.66 per diluted share for the same period in 2016. |
• | FFO of $118.6 million, or $1.34 per diluted share, compared to $118.7 million, or $1.35 per diluted share for the same period in 2016. |
• | Operating FFO of $119.6 million, or $1.36 per diluted share, compared to $119.9 million or $1.36 per diluted share for the same period in 2016. |
• | Net debt to annualized proforma adjusted EBITDA of 6.7X, interest coverage of 3.6X, and fixed charge coverage of 3.0X. |
• | Millennium Park, Livonia, Michigan, a 273,000 square foot power center anchored by Meijer (shadow), Costco (shadow), The Home Depot, Marshalls, Michaels and Five Below; |
• | Village Plaza, Lakeland, Florida, a 158,000 square foot center anchored by Hobby Lobby, Big Lots and Party City; |
• | Liberty Square, Wauconda, Illinois, a 107,000 square foot Jewel-Osco anchored center; and |
• | Rolling Meadows, Rolling Meadows, Illinois, a 134,000 square foot Jewel-Osco anchored center. |
• | Same Property NOI growth including redevelopment of 2.25% to 3.75%. |
• | Redevelopment Expenditures of $40.0 to $50.0 million. |
• | Year End Physical Occupancy of 93% - 94%. |
Measure | Low | High | ||
Cash NOI | $1.99 | $2.02 | ||
Non-cash adjustments | 0.08 | 0.08 | ||
General and administrative | (0.26) | (0.24) | ||
Interest expense | (0.50) | (0.49) | ||
Total Operating FFO | $1.31 | $1.37 | ||
RAMCO-GERSHENSON PROPERTIES TRUST | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands, except per share amounts) | |||||||
December 31, 2017 | December 31, 2016 | ||||||
ASSETS | (as revised) | ||||||
Income producing properties, at cost: | |||||||
Land | $ | 397,935 | $ | 374,889 | |||
Buildings and improvements | 1,732,844 | 1,757,781 | |||||
Less accumulated depreciation and amortization | (351,632 | ) | (345,204 | ) | |||
Income producing properties, net | 1,779,147 | 1,787,466 | |||||
Construction in progress and land available for development or sale | 58,243 | 61,224 | |||||
Real estate held for sale | — | 8,776 | |||||
Net real estate | 1,837,390 | 1,857,466 | |||||
Equity investments in unconsolidated joint ventures | 3,493 | 3,150 | |||||
Cash and cash equivalents | 8,081 | 3,582 | |||||
Restricted cash and escrows | 4,810 | 11,144 | |||||
Accounts receivable, net | 26,145 | 24,016 | |||||
Acquired lease intangibles, net | 59,559 | 72,424 | |||||
Other assets, net | 90,916 | 89,716 | |||||
TOTAL ASSETS | $ | 2,030,394 | $ | 2,061,498 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Notes payable, net | $ | 999,215 | $ | 1,021,223 | |||
Capital lease obligation | 1,022 | 1,066 | |||||
Accounts payable and accrued expenses | 56,750 | 57,357 | |||||
Acquired lease intangibles, net | 60,197 | 63,734 | |||||
Other liabilities | 8,375 | 9,893 | |||||
Distributions payable | 19,666 | 19,627 | |||||
TOTAL LIABILITIES | 1,145,225 | 1,172,900 | |||||
Commitments and Contingencies | |||||||
Ramco-Gershenson Properties Trust ("RPT") Shareholders' Equity: | |||||||
Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series D Cumulative Convertible Perpetual Preferred Shares, (stated at liquidation preference $50 per share), 1,849 shares issued and outstanding as of December 31, 2017 and 2016, respectively | 92,427 | 92,427 | |||||
Common shares of beneficial interest, $0.01 par, 120,000 shares authorized, 79,366 and 79,272 shares issued and outstanding as of December 31, 2017 and 2016, respectively | 794 | 793 | |||||
Additional paid-in capital | 1,160,862 | 1,158,430 | |||||
Accumulated distributions in excess of net income | (392,619 | ) | (384,934 | ) | |||
Accumulated other comprehensive income | 2,858 | 985 | |||||
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT | 864,322 | 867,701 | |||||
Noncontrolling interest | 20,847 | 20,897 | |||||
TOTAL SHAREHOLDERS' EQUITY | 885,169 | 888,598 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,030,394 | $ | 2,061,498 |
RAMCO-GERSHENSON PROPERTIES TRUST | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Three Months | Twelve Months | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
REVENUE | ||||||||||||||||
Minimum rent | $ | 48,392 | $ | 48,253 | $ | 198,362 | $ | 192,793 | ||||||||
Percentage rent | 134 | 90 | 704 | 600 | ||||||||||||
Recovery income from tenants | 14,603 | 14,774 | 61,258 | 62,841 | ||||||||||||
Other property income | 993 | 1,239 | 4,303 | 4,167 | ||||||||||||
Management and other fee income | 141 | 98 | 455 | 529 | ||||||||||||
TOTAL REVENUE | 64,263 | 64,454 | 265,082 | 260,930 | ||||||||||||
EXPENSES | ||||||||||||||||
Real estate tax expense | 10,012 | 10,029 | 42,683 | 41,739 | ||||||||||||
Recoverable operating expense | 6,954 | 8,355 | 27,653 | 29,581 | ||||||||||||
Non-recoverable operating expense | 1,233 | 1,014 | 4,449 | 3,575 | ||||||||||||
Depreciation and amortization | 22,053 | 21,986 | 91,335 | 91,793 | ||||||||||||
Acquisition costs | — | 198 | — | 316 | ||||||||||||
General and administrative expense | 7,383 | 4,967 | 26,159 | 22,041 | ||||||||||||
Provision for impairment | 982 | — | 9,404 | 977 | ||||||||||||
TOTAL EXPENSES | 48,617 | 46,549 | 201,683 | 190,022 | ||||||||||||
OPERATING INCOME | 15,646 | 17,905 | 63,399 | 70,908 | ||||||||||||
OTHER INCOME AND EXPENSES | ||||||||||||||||
Other expense, net | (96 | ) | 129 | (708 | ) | (177 | ) | |||||||||
Gain on sale of real estate | 16,843 | 96 | 52,764 | 35,781 | ||||||||||||
Earnings from unconsolidated joint ventures | 50 | 117 | 273 | 454 | ||||||||||||
Interest expense | (10,995 | ) | (10,696 | ) | (44,866 | ) | (44,514 | ) | ||||||||
Other gain on unconsolidated joint ventures | — | — | — | 215 | ||||||||||||
(Loss) on extinguishment of debt | — | (409 | ) | — | (1,256 | ) | ||||||||||
INCOME BEFORE TAX | 21,448 | 7,142 | 70,862 | 61,411 | ||||||||||||
Income tax provision | (24 | ) | (65 | ) | (143 | ) | (299 | ) | ||||||||
NET INCOME | 21,424 | 7,077 | 70,719 | 61,112 | ||||||||||||
Net income attributable to noncontrolling partner interest | (501 | ) | (166 | ) | (1,659 | ) | (1,448 | ) | ||||||||
NET INCOME ATTRIBUTABLE TO RPT | 20,923 | 6,911 | 69,060 | 59,664 | ||||||||||||
Preferred share dividends | (1,675 | ) | (1,676 | ) | (6,701 | ) | (6,701 | ) | ||||||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | 19,248 | $ | 5,235 | $ | 62,359 | $ | 52,963 | ||||||||
EARNINGS PER COMMON SHARE | ||||||||||||||||
Basic | $ | 0.24 | $ | 0.07 | $ | 0.78 | $ | 0.66 | ||||||||
Diluted | $ | 0.24 | $ | 0.07 | $ | 0.78 | $ | 0.66 | ||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||||
Basic | 79,366 | 79,268 | 79,344 | 79,236 | ||||||||||||
Diluted | 79,550 | 79,461 | 79,530 | 79,435 |
RAMCO-GERSHENSON PROPERTIES TRUST | |||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||||||
FUNDS FROM OPERATIONS | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 21,424 | $ | 7,077 | $ | 70,719 | $ | 61,112 | |||||||
Net income attributable to noncontrolling partner interest | (501 | ) | (166 | ) | (1,659 | ) | (1,448 | ) | |||||||
Preferred share dividends | (1,675 | ) | (1,676 | ) | (6,701 | ) | (6,701 | ) | |||||||
Net income available to common shareholders | 19,248 | 5,235 | 62,359 | 52,963 | |||||||||||
Adjustments: | |||||||||||||||
Rental property depreciation and amortization expense | 21,993 | 21,931 | 91,097 | 91,610 | |||||||||||
Pro-rata share of real estate depreciation from unconsolidated joint ventures | 73 | 73 | 302 | 310 | |||||||||||
Gain on sale of depreciable real estate | (16,945 | ) | — | (51,977 | ) | (34,108 | ) | ||||||||
Gain on sale of joint venture depreciable real estate | — | — | — | (26 | ) | ||||||||||
Provision for impairment on income-producing properties | — | — | 8,422 | — | |||||||||||
Other gain on unconsolidated joint ventures | — | — | — | (215 | ) | ||||||||||
FFO available to common shareholders | 24,369 | 27,239 | 110,203 | 110,534 | |||||||||||
Noncontrolling interest in Operating Partnership (1) | 501 | 166 | 1,659 | 1,448 | |||||||||||
Preferred share dividends (assuming conversion) (2) | 1,675 | 1,676 | 6,701 | 6,701 | |||||||||||
FFO available to common shareholders and dilutive securities | $ | 26,545 | $ | 29,081 | $ | 118,563 | $ | 118,683 | |||||||
(Gain) loss on sale of land | 102 | (96 | ) | (787 | ) | (1,673 | ) | ||||||||
Provision for impairment on land available for development or sale | 982 | — | 982 | 977 | |||||||||||
Severance expense | 60 | 43 | 715 | 492 | |||||||||||
Loss on early extinguishment of debt | — | — | — | 1,256 | |||||||||||
Acquisition costs | — | 198 | — | 316 | |||||||||||
Cost associated with early extinguishment of debt | 30 | 281 | 110 | (128 | ) | ||||||||||
Operating FFO available to common shareholders and dilutive securities | $ | 27,719 | $ | 29,507 | $ | 119,583 | $ | 119,923 | |||||||
Weighted average common shares | 79,366 | 79,268 | 79,344 | 79,236 | |||||||||||
Shares issuable upon conversion of Operating Partnership Units (1) | 1,916 | 1,917 | 1,917 | 1,943 | |||||||||||
Dilutive effect of restricted stock | 184 | 193 | 186 | 199 | |||||||||||
Shares issuable upon conversion of preferred shares (2) | 6,740 | 6,630 | 6,740 | 6,630 | |||||||||||
Weighted average equivalent shares outstanding, diluted | 88,206 | 88,008 | 88,187 | 88,008 | |||||||||||
FFO available to common shareholders and dilutive securities per share, diluted | $ | 0.30 | $ | 0.33 | $ | 1.34 | $ | 1.35 | |||||||
Operating FFO available to common shareholders and dilutive securities per share, diluted | $ | 0.31 | $ | 0.34 | $ | 1.36 | $ | 1.36 | |||||||
Dividend per common share | $ | 0.22 | $ | 0.22 | $ | 0.88 | $ | 0.86 | |||||||
Payout ratio - Operating FFO | 71.0 | % | 64.7 | % | 64.7 | % | 63.2 | % | |||||||
(1) | The total noncontrolling interest reflects OP units convertible 1:1 into common shares. |
(2) | Series D convertible preferred shares are paid annual dividends of $6.7 million and are currently convertible into approximately 6.7 million shares of common stock. They are dilutive only when earnings or FFO exceed approximately $0.25 per diluted share per quarter and $1.00 per diluted share per year. The conversion ratio is subject to adjustment based upon a number of factors, and such adjustment could affect the dilutive impact of the Series D convertible preferred shares on FFO and earning per share in future periods. |
Reconciliation of net income available to common shareholders to Same Property NOI | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income available to common shareholders | $ | 19,248 | $ | 5,235 | $ | 62,359 | $ | 52,963 | |||||||
Preferred share dividends | 1,675 | 1,676 | 6,701 | 6,701 | |||||||||||
Net income attributable to noncontrolling partner interest | 501 | 166 | 1,659 | 1,448 | |||||||||||
Income tax provision | 24 | 65 | 143 | 299 | |||||||||||
Interest expense | 10,995 | 10,696 | 44,866 | 44,514 | |||||||||||
Costs associated with early extinguishment of debt | — | 409 | — | 1,256 | |||||||||||
Earnings from unconsolidated joint ventures | (50 | ) | (117 | ) | (273 | ) | (454 | ) | |||||||
Gain on sale of real estate | (16,843 | ) | (96 | ) | (52,764 | ) | (35,781 | ) | |||||||
Gain on remeasurement of unconsolidated joint venture | — | — | — | (215 | ) | ||||||||||
Other expense, net | 96 | (129 | ) | 708 | 177 | ||||||||||
Management and other fee income | (141 | ) | (98 | ) | (455 | ) | (529 | ) | |||||||
Depreciation and amortization | 22,053 | 21,986 | 91,335 | 91,793 | |||||||||||
Acquisition costs | — | 198 | — | 316 | |||||||||||
General and administrative expenses | 7,383 | 4,967 | 26,159 | 22,041 | |||||||||||
Provision for impairment | 982 | — | 9,404 | 977 | |||||||||||
Lease termination fees | (23 | ) | (71 | ) | (83 | ) | (139 | ) | |||||||
Amortization of lease inducements | 44 | 44 | 175 | 221 | |||||||||||
Amortization of acquired above and below market lease intangibles, net | (1,130 | ) | (1,069 | ) | (4,397 | ) | (3,397 | ) | |||||||
Straight-line ground rent expense | 70 | 63 | 281 | 63 | |||||||||||
Amortization of acquired ground lease intangibles | 6 | 6 | 25 | 6 | |||||||||||
Straight-line rental income | (872 | ) | (948 | ) | (2,669 | ) | (2,383 | ) | |||||||
NOI | 44,018 | 42,983 | 183,174 | 179,877 | |||||||||||
NOI from Other Investments | (4,951 | ) | (4,788 | ) | (25,529 | ) | (25,866 | ) | |||||||
Same Property NOI with Redevelopment | 39,067 | 38,195 | 157,645 | 154,011 | |||||||||||
NOI from Redevelopment (1) | (6,016 | ) | (5,850 | ) | (23,991 | ) | (21,954 | ) | |||||||
Same Property NOI without Redevelopment | $ | 33,051 | $ | 32,345 | $ | 133,654 | $ | 132,057 | |||||||
(1) The NOI from Redevelopment adjustments represent 100% of the NOI related to Deerfield Towne Center, Hunter’s Square, Woodbury Lakes and West Oaks, and a portion of the NOI related to specific GLA at Spring Meadows, The Shoppes at Fox River II, The Shops on Lane Avenue, Mission Bay, River City Marketplace and Town & Country for the periods presented. Because of the redevelopment activity, the center or specific space is not considered comparable for the periods presented and adjusted out of Same Property NOI with Redevelopment in arriving at Same Property NOI without Redevelopment. | |||||||||||||||
Three Months Ended December 31, | |||||||
2017 | 2016 | ||||||
Reconciliation of net income to proforma adjusted EBITDA | |||||||
Net income | $ | 21,424 | $ | 7,077 | |||
Gain on sale of real estate | (16,843 | ) | (96 | ) | |||
Depreciation and amortization | 22,053 | 21,986 | |||||
Pro-rata share of depreciation from unconsolidated joint venture | 73 | 73 | |||||
Provision for impairment | 982 | — | |||||
Severance expense | 60 | 43 | |||||
Costs associated with early extinguishment of debt | — | 409 | |||||
Interest expense | 10,995 | 10,696 | |||||
Income tax provision | 24 | 65 | |||||
Lease termination income | (23 | ) | (71 | ) | |||
Acquisition costs | — | 198 | |||||
Adjusted EBITDA | 38,745 | 40,380 | |||||
Proforma adjustments (1) | (1,324 | ) | (251 | ) | |||
Proforma adjusted EBITDA | $ | 37,421 | $ | 40,129 | |||
Annualized proforma adjusted EBITDA | $ | 149,684 | $ | 160,516 | |||
Reconciliation of Notes Payable, net to Net Debt | |||||||
Notes payable, net | $ | 999,215 | $ | 1,021,223 | |||
Unamortized premium | (3,967 | ) | (5,120 | ) | |||
Deferred financing costs, net | 3,821 | 3,740 | |||||
Consolidated notional debt | 999,069 | 1,019,843 | |||||
Pro-rata share of debt from unconsolidated joint venture | 12,699 | — | |||||
Capital lease obligation | 1,022 | 1,066 | |||||
Cash and cash equivalents | (8,081 | ) | (3,582 | ) | |||
Net debt | $ | 1,004,709 | $ | 1,017,327 | |||
Reconciliation of interest expense to total fixed charges | |||||||
Interest expense | $ | 10,616 | $ | 10,351 | |||
Preferred share dividends | 1,675 | 1,676 | |||||
Scheduled mortgage principal payments | 758 | 777 | |||||
Total fixed charges | $ | 13,049 | $ | 12,804 | |||
Net debt to annualized proforma adjusted EBITDA | 6.7 | X | 6.3 | X | |||
Interest coverage ratio (Adjusted EBITDA / interest expense) | 3.6 | X | 3.9 | X | |||
Fixed charge coverage ratio (Adjusted EBITDA / fixed charges) | 3.0 | X | 3.2 | X | |||
(1) 4Q17 excludes $1.3 million from acquisitions and dispositions including our Millennium Park joint venture. 4Q16 excludes $0.3 million related to miscellaneous income. | |||||||