- Reported Funds from Operations (“FFO”) as adjusted of $0.27 per diluted share for the fourth quarter 2012 and $1.04 per diluted share for the full year 2012.
- Fourth quarter same-center net operating income (“NOI”) increased by 3.8% and full-year same-center NOI increased 3.3%, compared to the same periods in 2011.
- Core portfolio leased occupancy increased 110 basis points to 94.6%, compared to 93.5% at December 31, 2011.
- During 2012, the Company signed a total of 330 leases, encompassing 1.8 million square feet achieving same-space rental growth of 4.6%, including 81 leases signed in the fourth quarter of 2012 at same-space rental growth of 5.7%.
- During 2012, the Company completed $150.0 million in acquisitions, bolstering its presence in targeted markets. Fourth quarter 2012 acquisitions included Phase II of The Shoppes at Fox River in Waukesha (Milwaukee), Wisconsin anchored by T.J. Maxx. In addition, the Company purchased 12 acres of land for a Phase III development in response to tenant interest at the center.
- During 2012, the Company completed $79.0 million in dispositions of non-core assets, of which RPT’s share was $29.0 million, including five properties in Michigan.
- During 2012, the Company commenced the development of Phase I of Parkway Shops in Jacksonville, Florida, anchored by Marshalls and Dick’s Sporting Goods. The development is 98.2% leased and is slated to open in the second quarter of 2013.
- In the fourth quarter of 2012, the Company completed the redevelopment of Peachtree Hill in Duluth, Georgia featuring a new 45,000 square foot LA Fitness.
- During 2012, the Company closed a $360 million unsecured credit facility, including a $120 million 5-year term loan and a $240 million line of credit. At year-end, the Company had availability of $198.8 million under its line of credit.
- As of December 31, 2012, the Company’s unencumbered asset base was valued under the credit facility at approximately $765 million, compared to $569 million at the end of 2011.
- Net debt to EBITDA decreased to 6.6x, compared to 7.7x for the same period in 2011.
- Interest coverage was 3.2x and fixed charge coverage was 2.2x, representing increases compared to 2.3x and 1.6x, respectively, in the comparable period.
Financial ResultsFFO for the three months ended December 31, 2012, adjusted for provisions for impairment and gains on extinguishment of debt, was $13.4 million or $0.27 per diluted share, compared to FFO of $9.0 million, or $0.22 per diluted share for the same period in 2011. FFO for the twelve months ended December 31, 2012, adjusted for provisions for impairment and gains on extinguishment of debt, was $49.0 million or $1.04 per diluted share, compared to FFO of $41.7 million, or $1.01 per diluted share for the same period in 2011. FFO unadjusted was $0.24 and $1.02 per diluted share for the three and twelve months ended December 31, 2012, respectively. Net loss available to common shareholders for the three months ended December 31, 2012 was $(0.2) million or $(0.01) per diluted share. Net loss available to common shareholders for the twelve months ended December 31, 2012 was $(0.05) million or $(0.00) per diluted share. Operating Statistics As of December 31, 2012, the Company owned equity interests in 78 retail shopping centers and one office building consisting of 53 wholly-owned properties and 26 joint venture properties totaling 15.0 million square feet. At year end, the Company’s core portfolio improved to 94.6% leased, compared to a core portfolio leased rate of 93.5% at December 31, 2011. Its total portfolio, which includes redevelopment properties, improved to 93.8% leased, compared to a total portfolio leased rate of 91.4% at December 31, 2011. At year end, the Company had 42 properties in its wholly-owned, same-center portfolio with occupancy of 94.7%, compared to 93.1% for the same period last year. Same-center net operating income for the wholly-owned portfolio increased by 3.8% for the quarter and 3.3% for the twelve months ended December 31, 2012. During 2012, the Company signed a total of 330 leases, encompassing 1.8 million square feet, achieving same-space rental growth of 4.6%, including nine new anchor leases totaling 278,341 square feet. During the fourth quarter, the Company executed 81 lease transactions encompassing 431,295 square feet, achieving same-space rental growth of 5.7%.
Investment ActivityAcquisitions and Dispositions: During 2012, the Company completed $150.0 million in acquisitions. Previously announced core acquisitions for the year include Central Plaza in St. Louis, Missouri, Harvest Junction North and South in Longmont (Boulder), Colorado, and Nagawaukee Shopping Center in Nagawaukee (Milwaukee), Wisconsin, for an aggregate 616,393 square feet. All of the shopping centers are multi-anchored and are the market dominant community centers in their respective trade areas. During the fourth quarter, the Company acquired Phase II of The Shoppes at Fox River in Waukesha (Milwaukee), Wisconsin. The newly developed 47,058 square foot shopping center is leased to T.J. Maxx, Rue 21, ULTA Beauty and Charming Charlie. The Company also acquired 12 acres of land adjacent to the center for future development. The total acquisition price was $10.4 million. Also during the fourth quarter, the Company acquired a 49,644 square foot building adjoining its Spring Meadows Place shopping center in Holland (Toledo), Ohio for $2.4 million. Anchors at Spring Meadows, including anchor-owned space, are Target, Kroger, Sam’s Club, T.J. Maxx, Dick’s Sporting Goods and PetSmart. Spring Meadows is 95.6% leased. The Company’s 2012 disposition program focused on the least productive assets in its portfolio. During 2012, the company completed $79.0 million in dispositions of non-core assets, including five properties in Michigan. The Company’s share was $29.0 million. During the fourth quarter, the Company closed on the sale of the CVS Pharmacy at Collins Pointe Plaza in Cartersville (Atlanta), Georgia for $2.6 million, completing the full disposition of that shopping center. Additionally, Gratiot Crossing in Chesterfield, Michigan was conveyed to the lender for the release of $13.4 million in mortgage debt. Gratiot Crossing and Collins Pointe were both held in joint ventures. Development/Redevelopment: The development of Phase I of Parkway Shops in Jacksonville, Florida is proceeding on schedule for a spring 2013 opening. Parkway Shops is anchored by Dick’s Sporting Goods and Marshalls and is currently 98.2% leased.
During the fourth quarter, the Company completed the redevelopment of the Peachtree Hill shopping center in Duluth (Atlanta), Georgia. The redevelopment included the construction of a 45,000 square foot LA Fitness. Peachtree Hill is also anchored by a market-dominant Kroger supermarket.Financing Activities/Balance Sheet Financing Activities: During the year, the Company closed on a $360 million unsecured credit facility, including a $120 million term loan and a $240 million line of credit. At December 31, 2012, the Company had $198.8 million available under its line of credit and $4.2 million of cash on hand. During the fourth quarter, the Company refinanced The Shops on Lane Avenue in Upper Arlington (Columbus), Ohio with a ten-year mortgage loan of $28.7 million at an interest rate of 3.76%. Subsequent to quarter-end, the Company refinanced Market Plaza in Glen Ellyn (Chicago), Illinois with a five-year mortgage loan of $16.0 million at an interest rate of 2.86%. The Shops on Lane Avenue and Market Plaza are both held in joint ventures. Balance Sheet: At December 31, 2012, the Company’s total market capitalization equaled $1.3 billion, comprised of 51.2 million shares of common stock (or equivalents) valued at $681.7 million, 2.0 million shares of convertible perpetual preferred stock valued at $107.9 million and $543.1 million of consolidated debt and capital lease obligations, net of cash. In 2012, the Company posted solid improvements in its debt metrics. At December 31, 2012, the Company’s net debt to total market capitalization was 40.7%, compared to 51.0% for the same period in 2011. Its net debt to annualized EBITDA decreased to 6.6x, compared to 7.7x for the same period in 2011. At December 31, 2012, its unencumbered asset base was valued at approximately $765 million, compared to $569 million at December 31, 2011. Dividend During the fourth quarter, the Company increased its quarterly common share cash dividend by 3.0% to $0.16825 per share, or $0.6730 per share annualized, for the period of September 1, 2012 through December 31, 2012. Its common share dividend, along with its Series D convertible perpetual preferred dividend of $0.90625 per share, were paid on January 2, 2013 to shareholders of record on December 20, 2012. The Company’s FFO (adjusted) payout ratio for the quarter was 62.3%.
2013 GuidanceThe 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.
|RAMCO-GERSHENSON PROPERTIES TRUST|
|CONSOLIDATED BALANCE SHEETS|
|(In thousands, except per share amounts)|
|Income producing properties, at cost:|
|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|
|Accounts receivable, net||7,976||9,614|
|Other assets, net||72,953||59,236|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Mortgages and notes payable:|
|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|
|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, $0.01 par, 80,000 shares authorized, 48,489 and 38,735 shares issued and outstanding as of December 31, 2012 and 2011, respectively||485||387|
|Additional paid-in capital||683,609||570,225|
|Accumulated distributions in excess of net income||(249,070||)||(218,888||)|
|Accumulated other comprehensive loss||(5,241||)||(2,649||)|
|TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT||529,783||449,075|
|TOTAL SHAREHOLDERS' EQUITY||559,832||481,174|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||$||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,|
|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|
|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|
|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|
|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||)|
|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||)||$||(32,002||)|
|(LOSS) EARNINGS PER COMMON SHARE, BASIC|
|(LOSS) EARNINGS PER COMMON SHARE, DILUTED|
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING|
|RAMCO-GERSHENSON PROPERTIES TRUST|
|FUNDS FROM OPERATIONS|
|(in thousands, except per share data)|
|Three months ended||Twelve months ended|
|December 31,||December 31,|
|Net loss available to common shareholders||$||(232||)||$||(38,909||)||$||(46||)||$||(32,002||)|
|Rental property depreciation and amortization expense||10,359||9,260||39,240||36,271|
|Pro-rata share of real estate depreciation from unconsolidated joint ventures||1,600||4,366||6,584||9,310|
|Gain on sale of depreciable real estate||-||(1,020||)||(336||)||(7,197||)|
|Loss (gain) on sale of joint venture depreciable real estate (1)||-||-||75||(2,718||)|
|Provision for impairment on income-producing properties (2)||379||16,332||2,355||16,332|
|Provision for impairment on equity investments in unconsolidated joint ventures||92||9,611||386||9,611|
|Provision for impairment on joint venture income-producing properties (1)||-||1,644||50||1,644|
|Deferred gain recognized upon acquisition of real estate||-||-||(845||)||-|
|Noncontrolling interest in Operating Partnership||79||(2,486||)||353||(1,742||)|
|FUNDS FROM OPERATIONS||$||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.|