Brixmor Property Group Reports Second Quarter 2014 Results

- Achieves Same Property NOI Growth of 3.8% -
- Increases FFO per Share by 12% -

PR Newswire

NEW YORK, Aug. 5, 2014 /PRNewswire/ -- Brixmor Property Group Inc. (BRX) announced today its results of operations for the second quarter ended June 30, 2014.

Second Quarter 2014 Operating Results – IPO Portfolio



Three Months Ended





6/30/2014


6/30/2013


Change

Percent leased


92.5%


91.6%


+90 basis points

Percent leased: anchors (≥ 10K SF)


97.0%


96.4%


+60 basis points

Percent leased: small shop (


82.1%


80.6%


+150 basis points

Total new signed leases (SF)


1,094,245


949,309


+15.3%

Total rent spread (cash)


11.2%


8.4%


+280 basis points

New lease rent spread (cash)


27.3%


22.7%


+460 basis points

Brixmor delivered another quarter of strong results driven by continued growth in revenues and momentum in operating fundamentals.  Same property NOI increased 3.8% in the second quarter, marking the eighth consecutive quarter of growth over 3.5%.  Funds from operations ("FFO") per diluted share growth accelerated during the quarter, increasing 12.2% over 2013.  Additionally, the Company's operating partnership, Brixmor Operating Partnership, L.P., received an investment grade rating from Moody's Investors Service during the quarter.

The positive trajectory of the Company's operating metrics was driven by record leasing activity, with new lease volume of 1.1 million square feet during the quarter, the highest in three years and driven by strong anchor and small shop leasing.  In addition, as part of its continued efforts to maximize the potential of its shopping centers, the Company commenced eight new anchor space repositioning projects with high quality retailers including Walmart, WinCo Foods, Fresh Thyme Farmers Market (Meijer), CVS and REI.

"Our performance metrics continue to demonstrate the value creation opportunity embedded within our portfolio as we realize the substantial mark-to-market in our leases, achieving blended leasing spreads of 11% or higher for the fourth consecutive quarter.  With a focus on operations across our organization, we continue to drive rents and occupancy, while simultaneously enhancing the quality and credit of our merchandise mix.  These efforts continue to produce results higher than the industry as demonstrated by our same property NOI growth in the quarter," stated Michael Carroll, Chief Executive Officer.  "In addition, we were pleased to have our balance sheet progress recognized by an investment grade rating assigned by Moody's."

Dividend
The Company's Board of Directors declared a quarterly cash dividend of $0.20 per common share (equivalent to $0.80 per annum) for the third quarter of 2014. The dividend is payable on October 15, 2014 to stockholders of record on October 3, 2014, representing an ex-dividend date of October 1, 2014.

Financial Highlights
For the second quarter of 2014, Brixmor reported FFO attributable to stockholders and non-controlling interests convertible into common stock of $140.1 million, or $0.46 per diluted share, up 12.2% on a diluted per share basis from $125.9 million, or $0.41 per diluted share, on a pro forma basis in the second quarter of 2013. FFO attributable to stockholders and non-controlling interests convertible into common stock for the second quarter of 2013 includes approximately $1.7 million, or ($0.01) per diluted share, of costs related to the early prepayment of debt.  Net income attributable to common stockholders for the three-month period ended June 30, 2014 was $23.5 million, or $0.10 per diluted share, compared with $4.9 million, or $0.02 per diluted share, on a pro forma basis in the second quarter of 2013.  See "IPO Portfolio" below for more information on pro forma results of operations.

For the six months ended June 30, 2014, Brixmor reported FFO attributable to stockholders and non-controlling interests convertible into common stock on a pro forma basis of $272.7 million, or $0.90 per diluted share, up 9.8% on a diluted per share basis from $249.3 million, or $0.82 per diluted share, on a pro forma basis in the six months ended June 30, 2013.  FFO attributable to stockholders and non-controlling interests convertible into common stock for the six months ended June 30, 2014 includes approximately $3.0 million, or ($0.01) per diluted share, of costs related to the early prepayment of debt.  Net income attributable to common stockholders for the six month period ended June 30, 2014 was $38.9 million on a pro forma basis, or $0.17 per diluted share, compared with $5.5 million, or $0.02 per diluted share, on a pro forma basis in the six month period ended June 30, 2013. 

For the first six months of 2014, Brixmor reported net income attributable to common stockholders (actual results) of $38.9 million, or $0.17 per diluted share. 

Same Property NOI for the second quarter increased 3.8% from the comparable 2013 period primarily due to growth in rental income driven by improved leasing spreads as the Company continues to harvest the below-market leases inherent in its portfolio.  For the first six months of 2014, same property NOI increased 3.8% from the comparable 2013 period.  In addition, annualized base rent per square foot for the portfolio increased to $12.04 at June 30, 2014 from $11.83 in the year ago period.  

Capital Structure
In May, Moody's Investors Service assigned an investment grade issuer rating of Baa3 with a stable outlook to the Company's operating partnership, Brixmor Operating Partnership, L.P.   Also in May, the Company was added to the MSCI US REIT Index as part of its semi-annual index review.

In June, the Company completed a $775 million secondary offering of 34,442,500 shares of its common stock by certain selling stockholders affiliated with The Blackstone Group L.P. at a price to the public of $22.50 per share.  The Company did not offer any shares of common stock in the offering and did not receive any proceeds from the sale of shares in this offering.

Michael Carroll, Chief Executive Officer, added, "The completion of our first secondary offering and the addition of BRX to the MSCI US REIT Index are important catalysts in providing us additional visibility to US equity REIT investors, while also positively impacting the depth of our shareholder base."

Guidance
The Company's previously provided expectations for 2014 earnings and portfolio metrics are on page 50 of its Supplemental Disclosure and the Company is affirming such guidance.   See "Conference Call and Supplemental Information" below for more information on the Company's Supplemental Disclosure.

IPO Portfolio
In connection with the Company's initial public offering (the "IPO"), the Company acquired interests in 43 properties (the "Acquired Properties") from certain investment funds affiliated with The Blackstone Group L.P. ("Blackstone").  Also in connection with the IPO, the Company issued to certain funds affiliated with Blackstone and Centerbridge Partners L.P. (the "pre-IPO owners") an interest in its Operating Partnership allocating to these pre-IPO owners all of the economic consequences of ownership of 47 excluded properties (the "Excluded Properties"). 

The Company's IPO Portfolio includes all properties owned as of the completion of the IPO, including the Acquired Properties and excluding the Excluded Properties, and constitutes the go forward properties owned by the Company.  The IPO Portfolio performance is captured in the pro forma results.  These results reflect the impact of the transactions associated with the IPO, including (i) the contribution of the Acquired Properties, (ii) the distribution of the Excluded Properties, (iii) the acquisition of the interest not already held in Arapahoe Crossings L.P., (iv) borrowings under the unsecured credit facility, including the use thereof, and (v) the net proceeds from the IPO, including the use thereof.  The pro forma adjustments associated with these transactions assume that each transaction was completed as of December 31, 2013 for the purpose of the unaudited pro forma consolidated balance sheet and as of January 1, 2014 and January 1, 2013, respectively, for the purpose of the unaudited pro forma consolidated statements of operations.  A reconciliation of pro forma balance sheet and results of operations is presented in the attached table. 

Conference Call and Supplemental Information
The Company will host a teleconference on Wednesday, August 6, 2014 at 1:00 PM ET.   To participate, please dial 888.317.6003 (domestic) or 412.317.6061 (international) at least ten minutes prior to the scheduled start of the call (Passcode:8430357).  The teleconference can also be accessed via a live webcast at www.brixmor.com in the Investors section. A replay of the teleconference will be available through midnight ET on August 20, 2014 by dialing 877.344.7529 (domestic) or 412.317.0088 (international) (Passcode:10047196) or via the web through August 6, 2015 at www.brixmor.com in the Investors section.

The Company's Supplemental Disclosure will be posted at www.brixmor.com in the Investors section.  These materials are also available to all interested parties upon request to the Company at investorrelations@brixmor.com or 800.468.7526.

Non-GAAP Disclosures
FFO
FFO is a supplemental non-GAAP financial measure utilized to evaluate the operating performance of real estate companies. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) in accordance with GAAP excluding (i) gain (loss) on disposition of operating properties, and (ii) extraordinary items, plus (iii) depreciation and amortization of operating properties, (iv) impairment of operating properties and real estate equity investments, and (v) after adjustments for joint ventures calculated to reflect funds from operations on the same basis. FFO attributable to stockholders and non-controlling interests convertible into common stock is FFO as further adjusted to exclude net income (loss) attributable to non-controlling interests not convertible into common stock. The Company believes FFO attributable to stockholders and non-controlling interests convertible into common stock is a meaningful supplemental measure that is more reflective of its operating performance by excluding FFO attributable to non-controlling interests not convertible into common stock.

The Company presents FFO and FFO attributable to stockholders and non-controlling interests convertible into common stock as it considers them important supplemental measures of its operating performance and the Company believes they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. FFO and FFO attributable to stockholders and non-controlling interests convertible into common stock should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of financial performance and are not alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of liquidity. Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations and, accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of FFO and FFO attributable to stockholders and non-controlling interests convertible into common stock may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from FFO and FFO attributable to stockholders and non-controlling interests convertible into common stock are significant components in understanding and addressing financial performance.

A reconciliation of FFO and FFO attributable to non-controlling interests not convertible into common stock to Net income (loss) is presented in the attached table.

Same Property NOI
Same property net operating income ("same property NOI") is calculated (using properties owned as of the end of both reporting periods and for the entirety of both periods excluding properties classified as discontinued operations), as rental income (minimum rent, percentage rents, tenant recoveries and other property income) less rental operating expenses (property operating expenses, real estate taxes and bad debt expense) of the properties owned by Brixmor. Same property NOI excludes corporate level income (including transaction and other fees), lease termination income, straight-line rent and amortization of above-/below-market leases of the same property pool from the prior year reporting period to the current year reporting period.

Same property NOI is a supplemental, non-GAAP financial measure utilized to evaluate the operating performance of real estate companies and is frequently used by securities analysts, investors and other interested parties in understanding business and operating results regarding the underlying economics of Brixmor's business operations. It includes only the net operating income of properties owned for the full period presented, which eliminates disparities in net income due to the acquisition or disposition of properties during the period presented, and therefore, provides a more consistent metric for comparing the performance of properties. Management uses same property NOI to review operating results for comparative purposes with respect to previous periods or forecasts, and also to evaluate future prospects. Same property NOI is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, net income (determined in accordance with GAAP) or other GAAP financial measures. Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP.  Computation of same property NOI may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to such other REITs.

About Brixmor Property Group
Brixmor owns and operates the nation's largest wholly owned portfolio of grocery-anchored community and neighborhood shopping centers, with 522 properties aggregating approximately 87 million square feet of gross leasable area located primarily across the top 50 U.S. metro markets.  Brixmor leverages its national footprint, local market knowledge and operational expertise to support the growth of its retail tenants. The Company is focused on maximizing the value of its portfolio through its extensive leasing capabilities and anchor space repositioning / redevelopment platform. Headquartered in New York City, the Company is the largest landlord to The TJX Companies and The Kroger Company.  For additional information, please visit www.brixmor.com.

Safe Harbor Language
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  These statements include, but are not limited to, statements related to the Company's expectations regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements.  You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "approximately," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2013, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov.  Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company's filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

 

CONSOLIDATED BALANCE SHEETS







Unaudited, dollars in thousands, except share information





















Actual Results


Pro Forma







6/30/14


12/31/13


12/31/13



Assets









Real estate










Land

$               1,998,895


$              2,055,802


$                1,989,160





Buildings and improvements

8,713,114


8,781,926


8,654,899







10,712,009


10,837,728


10,644,059





Accumulated depreciation and amortization

(1,360,647)


(1,190,170)


(1,160,478)




Real estate, net

9,351,362


9,647,558


9,483,581




Investments in and advances to unconsolidated joint ventures

5,104


9,205


5,171




Cash and cash equivalents

61,830


113,915


95,332




Restricted cash

64,927


75,457


74,847




Marketable securities

21,647


22,104


22,104




Receivables, net

171,131


178,505


175,584




Deferred charges and prepaid expenses, net

111,064


105,522


103,237




Other assets 

13,138


19,650


14,043



Total assets

$              9,800,203


$              10,171,916


$              9,973,899














Liabilities









Debt obligations, net

$               5,947,168


$               5,981,289


$              5,965,307




Financing liabilities, net

121,470


175,111


175,111




Accounts payable, accrued expenses and other liabilities

667,679


709,529


701,495



Total liabilities

6,736,317


6,865,929


6,841,913














Redeemable non-controlling interests

21,467


21,467


21,467



Commitments and contingencies

-


-


-














Equity









Common stock, $0.01 par value; authorized 3,000,000,000 shares;










245,095,327 and 229,689,960 shares outstanding

2,451


2,297


2,297




Additional paid in capital

2,709,311


2,543,690


2,543,690




Accumulated other comprehensive loss

(8,365)


(6,812)


(6,812)




Distributions and accumulated losses

(252,967)


(196,707)


(196,707)



Total stockholders' equity

2,450,430


2,342,468


2,342,468




Non-controlling interests

591,989


942,052


768,051



Total equity

3,042,419


3,284,520


3,110,519



Total liabilities and equity

$              9,800,203


$               10,171,916


$              9,973,899



































 

 

CONSOLIDATED STATEMENTS OF OPERATIONS








Unaudited, dollars in thousands, except per share amounts






































Pro Forma



Actual Results







Three Months Ended


Six Months Ended



Three Months Ended


Six Months Ended







6/30/14


6/30/13


6/30/14


6/30/13



6/30/14


6/30/13


6/30/14


6/30/13

























Revenues




















Rental income

$  240,076


$  232,662


$  477,336


$  463,724



$  240,076


$   216,296


$  477,336


$  430,854




Expense reimbursements

65,694


63,295


134,317


126,969



65,694


59,311


134,317


118,915




Other revenues

2,307


2,648


4,120


5,833



2,307


2,613


4,120


5,760



Total revenues

308,077


298,605


615,773


596,526



308,077


278,220


615,773


555,529

























Operating expenses




















Operating costs

31,902


29,895


66,790


62,099



31,902


27,659


66,790


57,506




Real estate taxes

43,835


43,369


88,281


87,433



43,835


40,995


88,281


82,696




Depreciation and amortization

109,666


119,901


222,934


242,956



109,666


108,622


222,934


220,399




Provision for doubtful accounts

2,988


2,682


5,865


5,160



2,988


2,573


5,865


4,885




Impairment of real estate assets

-


1,531


-


1,531



-


1,531


-


1,531




General and administrative

19,939


18,935


39,597


42,330



19,939


18,724


39,597


41,781



Total operating expenses

208,330


216,313


423,467


441,509



208,330


200,104


423,467


408,798

























Other income (expense)




















Dividends and interest

159


243


267


426



159


239


267


420




Interest expense

(65,953)


(72,029)


(133,919)


(144,938)



(65,953)


(94,373)


(133,919)


(186,244)




Gain (loss) on sale of real estate assets

-


722


378


561



-


722


378


722




Gain (loss) on extinguishment of debt, net

(757)


(1,668)


(3,033)


482



(757)


(1,668)


(3,033)


482




Other   

(1,969)


(3,047)


(4,130)


(4,008)



(1,969)


(3,710)


(4,130)


(4,671)



Total other income (expense)

(68,520)


(75,779)


(140,437)


(147,477)



(68,520)


(98,790)


(140,437)


(189,291)

























Income (loss) before equity in income of unconsolidated
    joint ventures

31,227


6,513


51,869


7,540



31,227


(20,674)


51,869


(42,560)



Equity in income of unconsolidated joint ventures

71


295


204


404



71


507


136


754



Gain on disposal of investments in unconsolidated
    joint ventures

-


-


-


-



-


-


1,820


-



Income (loss) from continuing operations

31,298


6,808


52,073


7,944



31,298


(20,167)


53,825


(41,806)

























Discontinued operations




















Income (loss) from discontinued operations

-


-


-


-



-


(302)


4,787


(1,077)




Gain on disposition of operating properties

-


-


-


-



-


2,631


14,426


2,631




Impairment of real estate held for sale 

-


-


-


-



-


(39,007)


-


(42,039)



Income (loss) from discontinued operations

-


-


-


-



-


(36,678)


19,213


(40,485)



Net income (loss)

31,298


6,808


52,073


7,944



31,298


(56,845)


73,038


(82,291)



Non-controlling interests



















Net (income) loss attributable to non-controlling interests

(7,825)


(1,926)


(13,172)


(2,453)



(7,825)


13,583


(34,164)


19,531



Net income (loss) attributable to common stockholders

$    23,473


$       4,882


$     38,901


$        5,491



$    23,473


$  (43,262)


$    38,874


$  (62,760)

























Per common share:




















Income (loss) from continuing operations:





















Basic 

$          0.10


$         0.02


$          0.17


$         0.02



$          0.10


$       (0.09)


$          0.17


$        (0.18)





Diluted 

$          0.10


$         0.02


$          0.17


$         0.02



$          0.10


$       (0.09)


$          0.17


$        (0.18)




Net income (loss) attributable to common stockholders:





















Basic 

$          0.10


$         0.02


$          0.17


$         0.02



$          0.10


$       (0.24)


$          0.17


$       (0.35)





Diluted 

$          0.10


$         0.02


$          0.17


$         0.02



$          0.10


$       (0.24)


$          0.17


$       (0.35)




Weighted average number of vested common shares:





















Basic 

228,978


228,113


228,547


228,113



228,978


180,675


228,547


180,675





Diluted 

230,469


230,194


229,907


230,194



230,469


180,675


229,907


180,675




































































 

RECONCILIATION OF NET INCOME (LOSS) TO FFO






Unaudited, dollars in thousands, except per share amounts










































Pro Forma



Actual Results







Three Months Ended


Six Months Ended



Three Months Ended


Six Months Ended







6/30/14


6/30/13


6/30/14


6/30/13



6/30/14


6/30/13


6/30/14


6/30/13

























Net income (loss)

$     31,298


$       6,808


$    52,073


$       7,944



$     31,298


$  (56,845)


$    73,038


$   (82,291)




Gain on disposition of operating properties

-


-


(378)


-



-


(2,631)


(14,804)


(2,631)




Gain on disposition of unconsolidated joint ventures

-


-


-


-



-


-


(1,820)


-




Depreciation and amortization- real estate
    related- continuing operations

109,073


119,401


221,658


241,948



109,073


108,122


221,658


219,391




Depreciation and amortization- real estate
    related- discontinued operations

-


-


-


-



-


3,135


431


6,984




Depreciation and amortization- real estate
    related- unconsolidated joint ventures

21


24


41


52



21


80


123


160




Impairment of operating properties

-


-


-


-



-


37,467


-


40,500



FFO



140,392


126,233


273,394


249,944



140,392


89,328


278,626


182,113




Adjustments attributable to non-controlling interests
    not convertible into common stock 

(322)


(342)


(646)


(671)



(322)


(342)


(5,878)


(671)



FFO attributable to stockholders and non-controlling
    interests convertible into common stock 

$   140,070


$    125,891


$  272,748


$  249,273



$   140,070


$    88,986


$  272,748


$    181,442

























FFO per share/OP Unit - diluted

$         0.46


$          0.41


$         0.90


$        0.82



$         0.46


$         0.37


$         0.90


$         0.75



Weighted average shares/OP Units outstanding -
    basic and diluted (1)

304,390


304,231


304,253


304,231



304,390


240,905


304,253


240,905

























Items that impact FFO comparability




















Gain (loss) on extinguishment of debt, net

$       (757)


$      (1,668)


$     (3,033)


$         482



$        (757)


$      (1,668)


$        3,041


$          482




Gain (loss) on extinguishment of debt per share

$             -


$        (0.01)


$       (0.01)


$             -



$              -


$        (0.01)


$          0.01


$               -

























Dividends declared per share/OP Unit

$        0.20




$         0.40





$         0.20




$          0.40





Shares/OP Unit dividends declared

$    60,846




$   121,692





$     60,846




$    121,692





Share/OP Unit dividend payout ratio (as % of FFO) 

43.4%




44.6%





43.4%




44.6%
















































(1) Basic and diluted shares/OP Units outstanding reflects an assumed conversion of certain BPG Sub shares and OP Units to common stock of the Company and the vesting of certain restricted stock


awards. 












































































































RECONCILIATION OF GAAP BALANCE SHEET TO PRO FORMA

BALANCE SHEET







Unaudited, dollars in thousands






















Actual Results




Pro Forma







12/31/13


Adjustments (1)


12/31/13



Assets









Real estate










Land

$          2,055,802


$              (66,642)


$            1,989,160





Buildings and improvements

8,781,926


(127,027)


8,654,899







10,837,728


(193,669)


10,644,059





Accumulated depreciation and amortization

(1,190,170)


29,692


(1,160,478)




Real estate, net

9,647,558


(163,977)


9,483,581




Investments in and advances to unconsolidated joint ventures

9,205


(4,034)


5,171




Cash and cash equivalents

113,915


(18,583)


95,332




Restricted cash

75,457


(610)


74,847




Marketable securities

22,104


-


22,104




Receivables, net

178,505


(2,921)


175,584




Deferred charges and prepaid expenses, net

105,522


(2,285)


103,237




Other assets 

19,650


(5,607)


14,043



Total assets

$            10,171,916


$              (198,017)


$          9,973,899














Liabilities









Debt obligations, net

$              5,981,289


$               (15,982)


$          5,965,307




Financing liabilities, net

175,111


-


175,111




Accounts payable, accrued expenses and other liabilities

709,529


(8,034)


701,495



Total liabilities

6,865,929


(24,016)


6,841,913














Redeemable non-controlling interests

21,467


-


21,467



Commitments and contingencies

-


-


-














Equity









Common stock, $0.01 par value; authorized 3,000,000,000 shares;










229,689,960 shares outstanding 

2,297


-


2,297




Additional paid in capital

2,543,690


-


2,543,690




Accumulated other comprehensive loss

(6,812)


-


(6,812)




Distributions and accumulated losses

(196,707)


-


(196,707)



Total stockholders' equity

2,342,468


-


2,342,468




Non-controlling interests

942,052


(174,001)


768,051



Total equity

3,284,520


(174,001)


3,110,519



Total liabilities and equity

$            10,171,916


$              (198,017)


$          9,973,899
























(1) Reflects the impact of distributing the Excluded Properties as if the distribution was completed on December 31, 2013. 




































 

RECONCILIATION OF GAAP STATEMENTS OF OPERATIONS TO PRO

FORMA STATEMENTS OF OPERATIONS












Unaudited, dollars in thousands, except per share amounts










































Three Months Ended 6/30/13


Six Months Ended 6/30/14


Six Months Ended 6/30/13







Actual Results


Adjustments (1)


Pro Forma


Actual Results


Adjustments (1)


Pro Forma


Actual Results


Adjustments (1)


Pro Forma



Revenues





















Rental income

$  216,296


$           16,366


$ 232,662


$   477,336


$                      -


$  477,336


$  430,854


$           32,870


$ 463,724




Expense reimbursements

59,311


3,984


63,295


134,317


-


134,317


118,915


8,054


126,969




Other revenues

2,613


35


2,648


4,120


-


4,120


5,760


73


5,833



Total revenues

278,220


20,385


298,605


615,773


-


615,773


555,529


40,997


596,526


























Operating expenses





















Operating costs

27,659


2,236


29,895


66,790


-


66,790


57,506


4,593


62,099




Real estate taxes

40,995


2,374


43,369


88,281


-


88,281


82,696


4,737


87,433




Depreciation and amortization

108,622


11,279


119,901


222,934


-


222,934


220,399


22,557


242,956




Provision for doubtful accounts

2,573


109


2,682


5,865


-


5,865


4,885


275


5,160




Impairment of real estate assets

1,531


-


1,531


-


-


-


1,531


-


1,531




General and administrative

18,724


211


18,935


39,597


-


39,597


41,781


549


42,330



Total operating expenses

200,104


16,209


216,313


423,467


-


423,467


408,798


32,711


441,509


























Other income (expense)





















Dividends and interest

239


4


243


267


-


267


420


6


426




Interest expense

(94,373)


22,344


(72,029)


(133,919)


-


(133,919)


(186,244)


41,306


(144,938)




Gain (loss) on sale of real estate assets

722


-


722


378


-


378


722


(161)


561




Gain (loss) on extinguishment of debt, net

(1,668)


-


(1,668)


(3,033)


-


(3,033)


482


-


482




Other   

(3,710)


663


(3,047)


(4,130)


-


(4,130)


(4,671)


663


(4,008)



Total other income (expense)

(98,790)


23,011


(75,779)


(140,437)


-


(140,437)


(189,291)


41,814


(147,477)


























Income (loss) before equity in income of unconsolidated
    joint ventures

(20,674)


27,187


6,513


51,869


-


51,869


(42,560)


50,100


7,540























Equity in income of unconsolidated joint ventures

507


(212)


295


136


68


204


754


(350)


404



Gain on disposal of investments in unconsolidated joint
    ventures

-


-


-


1,820


(1,820)


-


-


-


-



Income (loss) from continuing operations

(20,167)


26,975


6,808


53,825


(1,752)


52,073


(41,806)


49,750


7,944


























Discontinued operations





















Income from discontinued operations

(302)


302


-


4,787


(4,787)


-


(1,077)


1,077


-




Gain on disposition of operating properties

2,631


(2,631)


-


14,426


(14,426)


-


2,631


(2,631)


-




Impairment of real estate held for sale 

(39,007)


39,007


-


-


-


-


(42,039)


42,039


-



Income (loss) from discontinued operations

(36,678)


36,678


-


19,213


(19,213)


-


(40,485)


40,485


-


























Net income (loss)

(56,845)


63,653


6,808


73,038


(20,965)


52,073


(82,291)


90,235


7,944



Non-controlling interests





















Net (income) loss attributable to non-controlling interests 

13,583


(15,509)


(1,926)


(34,164)


20,992


(13,172)


19,531


(21,984)


(2,453)



Net income (loss) attributable to common stockholders

$ (43,262)


$           48,144


$      4,882


$     38,874


$                   27


$    38,901


$  (62,760)


$            68,251


$       5,491


























Per common share:





















Income (loss) from continuing operations:






















Basic 

$      (0.09)


$                 0.11


$         0.02


$           0.17


$                    -


$          0.17


$        (0.18)


$               0.20


$        0.02





Diluted 

$      (0.09)


$                 0.11


$         0.02


$           0.17


$                    -


$          0.17


$        (0.18)


$               0.20


$        0.02




Net income (loss) attributable to common stockholders:






















Basic 

$      (0.24)


$               0.26


$         0.02


$           0.17


$                    -


$          0.17


$       (0.35)


$                0.37


$        0.02





Diluted 

$      (0.24)


$               0.26


$         0.02


$           0.17


$                    -


$          0.17


$       (0.35)


$                0.37


$        0.02




Weighted average number of vested common shares:






















Basic 

180,675


47,438


228,113


228,547


-


228,547


180,675


47,438


228,113





Diluted 

180,675


49,519


230,194


229,907


-


229,907


180,675


49,519


230,194

























(1) Reflects the impact of the following transactions associated with the IPO including (i) the contribution of the Acquired Properties (ii) the distribution of the Excluded Properties (iii) the acquisition of 


the interest not already held in Arapahoe Crossings L.P. (iv) borrowings under the unsecured credit facility, including the use thereof and (v) the net proceeds from the IPO, including the use thereof. 


The pro forma adjustments for the three and six months ended June 30, 2013 associated with these transactions assume that each transaction was completed as of January 1, 2013.   The pro forma 



adjustments for the six months ended June 30, 2014 associated with these transactions assume that each transaction was completed as of January 1, 2014.   








 

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