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TheStreet Open House

Ramco-Gershenson Properties Trust Reports Financial Results For The Fourth Quarter And Full Year 2012

2013 Guidance

The Company has affirmed its 2013 guidance for FFO of $1.03 to $1.09 per diluted share (excluding impairment charges and gains/losses on extinguishment of debt), based on the following:

  • A core portfolio year end leased occupancy of between 94% and 95%.
  • An increase in same-center NOI of between 2% and 3%.
  • General and administrative expense of approximately $20 million.
  • Transactional income from land sales, lease terminations, and insurance settlements of approximately $0.05 per diluted share, compared to $0.04 per diluted share of such income in 2012.
  • As-converted treatment of the Company’s convertible preferred stock, if applicable.

The Company’s 2013 FFO does not include the effect of any potential acquisitions and dispositions.

Conference Call/Webcast

Ramco-Gershenson Properties Trust will host a live broadcast of its fourth quarter 2012 conference call on Wednesday, February 13, 2013, at 9:00 a.m. eastern time, to discuss its financial and operating results. The live broadcast will be available online at www.rgpt.com and www.investorcalendar.com and also by telephone at (877) 407-9205, no pass code needed. A replay will be available shortly after the call on the aforementioned websites (for ninety days) or by telephone at (877) 660-6853, (Conference ID # 407166), for one week.

Supplemental Materials

The Company’s supplemental financial package is available on its corporate web site at www.rgpt.com in the investor info section, SEC filings tab. If you wish to receive a copy via email, please send requests to dhendershot@rgpt.com.

About Ramco-Gershenson Properties Trust

Ramco-Gershenson Properties Trust (NYSE:RPT) is a fully integrated, self-administered, publicly-traded real estate investment trust (REIT) based in Farmington Hills, Michigan. The Company’s business is the ownership and management of multi-anchor shopping centers in strategic, quality of life markets throughout the Eastern, Midwestern and Central United States. At December 31, 2012, the Company owned and managed a portfolio of 78 shopping centers and one office building with approximately 15.0 million square feet of gross leasable area owned by the Company or its joint ventures. The properties are located in Michigan, Florida, Ohio, Georgia, Missouri, Colorado, Wisconsin, Illinois, Indiana, New Jersey, Virginia, Maryland, and Tennessee. At December 31, 2012, the Company’s core operating portfolio was 94.6% leased. For additional information regarding Ramco-Gershenson Properties Trust visit the Company's website at www.rgpt.com.

This press release may contain forward-looking statements that represent the Company’s expectations and projections for the future. Management of Ramco-Gershenson believes the expectations reflected in any forward-looking statements made in this press release are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary, including deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, our continuing to ability to qualify as a REIT and other factors discussed in the Company’s reports filed with the Securities and Exchange Commission.

 
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
 
    December 31,
2012     2011
ASSETS
Income producing properties, at cost:
Land $ 166,500 $ 133,145
Buildings and improvements 952,671 863,763
Less accumulated depreciation and amortization   (237,462 )   (222,722 )
Income producing properties, net 881,709 774,186
Construction in progress and land held for development or sale   98,541     87,549  
Net real estate 980,250 861,735
Equity investments in unconsolidated joint ventures 95,987 97,020
Cash and cash equivalents 4,233 12,155
Restricted cash 3,892 6,063
Accounts receivable, net 7,976 9,614
Note receivable - 3,000
Other assets, net   72,953     59,236  
TOTAL ASSETS $ 1,165,291   $ 1,048,823  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable:
Mortgages payable $ 293,156 $ 325,887
Unsecured revolving credit facility 40,000 29,500
Unsecured term loan facilities 180,000 135,000
Junior subordinated notes   28,125     28,125  
Total mortgages and notes payable 541,281 518,512
Capital lease obligation 6,023 6,341
Accounts payable and accrued expenses 21,589 18,662
Other liabilities 26,187 15,528
Distributions payable   10,379     8,606  
TOTAL LIABILITIES   605,459     567,649  
 

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), 2,000 shares issued and outstanding as of December 31, 2012 and December 31, 2011

$ 100,000 $ 100,000

Common shares of beneficial interest, $0.01 par, 80,000 shares authorized, 48,489 and 38,735 shares issued and outstanding as of December 31, 2012 and 2011, respectively

485 387
Additional paid-in capital 683,609 570,225
Accumulated distributions in excess of net income (249,070 ) (218,888 )
Accumulated other comprehensive loss   (5,241 )   (2,649 )
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT 529,783 449,075
Noncontrolling interest   30,049     32,099  
TOTAL SHAREHOLDERS' EQUITY   559,832     481,174  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,165,291   $ 1,048,823  
 

 
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
 

Three Months Ended December 31,

   

Twelve Months Ended December 31,

2012   2011 2012   2011
REVENUE
Minimum rent $ 24,014 $ 19,800 $ 90,354 $ 79,440
Percentage rent 223 30 601 244
Recovery income from tenants 8,394 8,254 31,664 29,673
Other property income 383 370 2,055 4,091
Management and other fee income   1,129     1,033     4,064     4,126  
TOTAL REVENUE   34,143     29,487     128,738     117,574  
 
EXPENSES
Real estate taxes 4,229 4,322 17,076 16,452
Recoverable operating expense 4,604 4,126 15,879 14,404
Other non-recoverable operating expense 882 1,272 2,838 3,540
Depreciation and amortization 10,489 9,089 39,479 34,594
General and administrative expense   4,699     4,381     19,445     19,646  
TOTAL EXPENSES   24,903     23,190     94,717     88,636  
 
INCOME BEFORE OTHER INCOME AND EXPENSES, TAX AND DISCONTINUED OPERATIONS 9,240 6,297 34,021 28,938
 
OTHER INCOME AND EXPENSES
Other expense, net (237 ) (38 ) (66 ) (257 )
Gain on sale of real estate - - 69 231
Earnings (loss) from unconsolidated joint ventures 1,164 (3,667 ) 3,248 1,669
Interest expense (6,386 ) (6,893 ) (25,895 ) (27,636 )
Amortization of deferred financing fees (341 ) (379 ) (1,449 ) (1,861 )
Provision for impairment (1,766 ) (16,917 ) (1,766 ) (16,917 )
Provision for impairment on equity investments in unconsolidated joint ventures (92 ) (9,611 ) (386 ) (9,611 )
Deferred gain recognized upon acquisition of real estate - - 845 -
Loss on extinguishment of debt   -     -     -     (1,968 )
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAX 1,582 (31,208 ) 8,621 (27,412 )
Income tax benefit (provision)   16     189     34     (795 )
INCOME (LOSS) FROM CONTINUING OPERATIONS   1,598     (31,019 )   8,655     (28,207 )
 
DISCONTINUED OPERATIONS
Gain on sale of real estate - 1,020 336 9,406
Gain on extinguishment of debt - 1,218 307 1,218
Provision for impairment - (10,883 ) (2,536 ) (10,883 )
Income (loss) from discontinued operations   61     86     330     (34 )
INCOME (LOSS) FROM DISCONTINUED OPERATIONS   61     (8,559 )   (1,563 )   (293 )
 
NET INCOME (LOSS) 1,659 (39,578 ) 7,092 (28,500 )
Net (income) loss attributable to noncontrolling partner interest   (79 )   2,481     112     1,742  
NET INCOME (LOSS) ATTRIBUTABLE TO RPT 1,580 (37,097 ) 7,204 (26,758 )
Preferred share dividends   (1,812 )   (1,812 )   (7,250 )   (5,244 )
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS $ (232 ) $ (38,909 ) $ (46 ) $ (32,002 )
 
(LOSS) EARNINGS PER COMMON SHARE, BASIC
Continuing operations $ (0.01 ) $ (0.79 ) $ 0.03 $ (0.83 )
Discontinued operations   -     (0.21 )   (0.03 )   (0.01 )
$ (0.01 ) $ (1.00 ) $ -   $ (0.84 )
(LOSS) EARNINGS PER COMMON SHARE, DILUTED
Continuing operations $ (0.01 ) $ (0.79 ) $ 0.03 $ (0.83 )
Discontinued operations   -     (0.21 )   (0.03 )   (0.01 )
$ (0.01 ) $ (1.00 ) $ -   $ (0.84 )
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic   47,873     38,735     44,101     38,466  
Diluted   47,873     38,735     44,485     38,466  
 

 
RAMCO-GERSHENSON PROPERTIES TRUST
FUNDS FROM OPERATIONS
(in thousands, except per share data)
 
  Three months ended   Twelve months ended
December 31,   December 31,
2012   2011 2012   2011
 
Net loss available to common shareholders $ (232 ) $ (38,909 ) $ (46 ) $ (32,002 )
Adjustments:
Rental property depreciation and amortization expense 10,359 9,260 39,240 36,271
Pro-rata share of real estate depreciation from unconsolidated joint ventures 1,600 4,366 6,584 9,310
Gain on sale of depreciable real estate - (1,020 ) (336 ) (7,197 )
Loss (gain) on sale of joint venture depreciable real estate (1) - - 75 (2,718 )
Provision for impairment on income-producing properties (2) 379 16,332 2,355 16,332
Provision for impairment on equity investments in unconsolidated joint ventures 92 9,611 386 9,611
Provision for impairment on joint venture income-producing properties (1) - 1,644 50 1,644
Deferred gain recognized upon acquisition of real estate - - (845 ) -
Noncontrolling interest in Operating Partnership   79     (2,486 )   353     (1,742 )
FUNDS FROM OPERATIONS $ 12,277 $ (1,202 ) $ 47,816 $ 29,509
 
Provision for impairment for land available for sale 1,387 11,468 1,387 11,468
(Gain) loss on extinguishment of debt - (1,218 ) - 750
Gain on extinguishment of joint venture debt, net of RPT expenses (1)(3)   (221 )   -     (178 )   -  
FUNDS FROM OPERATIONS, EXCLUDING ITEMS ABOVE $ 13,443  

 

$ 9,048  

 

$ 49,025  

 

$ 41,727  
 
Weighted average common shares 47,873 38,735 44,101 38,466
Shares issuable upon conversion of Operating Partnership Units 2,370 2,629 2,509 2,785
Dilutive effect of securities   391     132     384     145  
WEIGHTED AVERAGE EQUIVALENT SHARES OUTSTANDING, DILUTED   50,634     41,496     46,994     41,396  
 
FUNDS FROM OPERATIONS, PER DILUTED SHARE $ 0.24   $ (0.03 ) $ 1.02   $ 0.71  
FUNDS FROM OPERATIONS, EXCLUDING ITEMS ABOVE, PER DILUTED SHARE $ 0.27   $ 0.22   $ 1.04   $ 1.01  
 
Dividend per common share $ 0.16825 $ 0.16325 $ 0.6580 $ 0.6530
Payout ratio - FFO, excluding items above 62.3 % 74.2 % 63.3 % 64.7 %
 

(1)

 

Amount included in earnings from unconsolidated joint ventures.

(2)

The twelve months ended December 31, 2012 amount includes $1.9 million which represents our proportionate ownership share of the total for one property that was previously held in a consolidated partnership. In June 2012, the partnership completed a deed-in-lieu transfer to the lender in exchange for full release under its mortgage loan obligation in the amount of $8.5 million.

(3)

The twelve months ended December 31, 2012 amount includes RPT's costs associated with the liquidation of two joint ventures concurrent with the extinguishment of their debt.

 

Management considers funds from operations, also known as “FFO,” an appropriate supplemental measure of the financial performance of an equity REIT. Under the NAREIT definition, FFO represents net income attributable to common shareholders, excluding extraordinary items, as defined under accounting principles generally accepted in the United States of America (“GAAP”), gains (losses) on sales of depreciable property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures. In addition, NAREIT has recently clarified its computation of FFO to exclude impairment charges on depreciable property and equity investments in depreciable property. Management has restated FFO for prior periods accordingly. FFO should not be considered an alternative to GAAP net income attributable to common shareholders as an indication of our performance. We consider FFO as a useful measure for reviewing our comparative operating and financial performance between periods or to compare our performance to different REITs. However, our computation of FFO may differ from the methodology for calculating FFO utilized by other real estate companies, and therefore, may not be comparable to these other real estate companies.

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