RPT Realty - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - April 26, 2011

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8-K - RAMCO-GERSHENSON PROPERTIES TRUST 8-K - RPT Realtya6696419.htm
EX-99.2 - EXHIBIT 99.2 - RPT Realtya6696419ex99_2.htm
Exhibit 99.1
 

 
Ramco-Gershenson Properties Trust Reports Financial Results for the First Quarter of 2011
 
FARMINGTON HILLS, Mich.--(BUSINESS WIRE)--April 26, 2011--Ramco-Gershenson Properties Trust (NYSE:RPT) today announced results for the three months ended March 31, 2011.
 
Highlights for the First Quarter:
 
·  
Executed 106 leases encompassing 603,983 square feet, including 6 leases for anchors totaling 229,587 square feet. Anchor leases signed in the first quarter included Bed Bath & Beyond (2 stores), buybuy Baby, LA Fitness, Dunham’s Sporting Goods and MC Sports. At quarter end, the Company’s total portfolio was 90.1% leased.
 
·  
Closed a $24.7 million CMBS loan with an interest rate of 5.76% on Jackson Crossing and issued $8.6 million of common equity under a controlled equity offering program. Proceeds were used to repay the Company’s $30.0 million term loan.
 
·  
Completed construction of its redevelopments at West Allis Towne Centre and The Shops at Old Orchard, which are both expected to stabilize over the next year.
 
Subsequent to quarter end, the Company closed an offering of $80 million of 7.25% convertible perpetual preferred stock and received commitments from a bank syndicate for a new $250 million unsecured bank facility.
 
“The results of our first quarter demonstrate that we are on track with our business plan for the year,” said Dennis Gershenson, President and CEO. “Our efforts over these last months on balance sheet improvement have produced a very healthy capital structure which allows us to focus all of our attention on growing the Company through an aggressive leasing program, cost containment and external opportunities.”
 
Financial Results
 
Funds from Operations (FFO) for the three months ended March 31, 2011 was $10.1 million or $0.25 per diluted share, as compared to FFO of $8.5 million, or $0.25 per diluted share for the same period in 2010. FFO per share amounts were impacted by a 7.2 million increase in the number of weighted average shares outstanding for the three months ended March 31, 2011, compared to the same period last year.
 
Net loss attributable to RPT common shareholders for the three months ended March 31, 2011 was $0.3 million or $0.01 per diluted share, compared to $0.7 million or $0.02 per diluted share for the same period in 2010.
 
 
 
 
 
Operating Statistics
 
As of March 31, 2011, the Company owned equity interests in 89 retail shopping centers and one office building consisting of 58 wholly-owned properties and 32 joint venture properties totaling 20.5 million square feet of gross leasable area, of which 15.6 million is owned by the Company or its joint ventures. At quarter-end, the total portfolio was 90.1% leased.
 
During the quarter, the Company executed 106 lease transactions, including 72 renewals, in its wholly-owned and joint venture portfolios encompassing 603,983 square feet. For spaces with prior rents, the Company executed 99 leases totaling 424,978 square feet at an average cash rental rate of $13.00 per square foot, a decrease of 5.6%. Excluding one anchor lease, the average rental rate decrease was 1.8%.
 
At quarter-end, the Company had 45 properties in its wholly-owned, same-center portfolio. On a same- center basis, occupancy was 90.9% compared to 91.2% for the same period last year. Same-center net operating income for our wholly-owned portfolio decreased 0.1% for the quarter, compared to the same period in 2010.
 
Capital Markets Activity/Balance Sheet
 
During the quarter, the Company sold 650,000 common shares through a controlled equity offering at a weighted average gross price of $13.30. Gross proceeds from the offering were $8.6 million. Also during the quarter, the Company closed on a new CMBS loan in the amount of $24.7 million for its Jackson Crossing shopping center in Jackson, Michigan. Proceeds from these transactions were used for the early repayment of the Company’s $30.0 million term loan.
 
Subsequent to quarter-end, the Company completed an $80.0 million cumulative convertible perpetual preferred offering priced at a dividend rate of 7.25%. Net proceeds from the transaction, in the amount of $77.6 million, were used to pay down the Company’s $30 million bridge loan and reduce borrowings on its revolving line of credit. The Company granted the underwriters a 30-day option to purchase up to an additional $12 million of the preferred shares.
 
Also subsequent to quarter end, the Company received commitments from a bank syndicate for a new $250 million unsecured bank facility comprised of a $175 million revolving line of credit and a $75 million term loan. The revolving line and term loan have terms of three and four years, respectively, and each features a one-year extension at the Company’s option. Interest cost for the facility ranges from 200 to 275 basis points over LIBOR based upon the Company’s leverage. The banks’ commitments are subject to final documentation and closing, which the Company expects to occur within the next month.
 
At March 31, 2011, the Company’s total market capitalization equaled $1.1 billion, comprised of 41.7 million shares of common stock (or equivalents) valued at $522.3 million and $571.5 million of debt and capital lease obligations, net of cash. The Company’s ratio of net debt to total market capitalization was 52.2%. The weighted-average term of the Company’s debt was approximately 4.8 years. At March 31, 2011, net debt to EBITDA was 8.1x compared to 8.0x for the same period in 2010. Proforma for the convertible preferred equity offering, net debt to EBITDA at March 31, 2011 would be 7.0x.
 
 
 
 
 
Dividend
 
On April 1, 2011, the Company paid a first quarter cash dividend of $0.16325 per common share (or equivalents) to shareholders of record on March 20, 2011, for the first quarter ended March 31, 2011. The quarterly dividend represents an annualized dividend rate of $0.653 per common share (or equivalents). The Company’s FFO payout ratio for the quarter was 66.4%.
 
2011 Guidance
 
The Company’s previously announced 2011 FFO guidance range of $0.90 to $1.00 per diluted share, excluding non-recurring items, remains unchanged. As a result of establishing a new credit facility with an unsecured structure and lower interest rate, the Company expects to write-off a portion of the deferred financing costs related to the existing credit facility that is being replaced. Any such costs are not included in the guidance range above.
 
Conference Call/Webcast
 
Ramco-Gershenson Properties Trust will host a live broadcast of its first quarter conference call on Wednesday, April 27, 2011, at 9:00 a.m. eastern time, to discuss its financial and operating results as well as guidance for 2011. The live broadcast will be available online at www.rgpt.com and www.investorcalendar.com and also by telephone at (877) 407-0778, no pass code. A replay will be available shortly after the call on the aforementioned websites (for ninety days) or by telephone at (877) 660-6853, (pass code-Account #286, Conference ID # 370373), 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. Our primary business is the ownership and management of shopping centers in targeted markets in the Eastern and Midwestern regions of the United States. At March 31, 2011, the Company owned interests in 89 shopping center properties and one office building that comprise approximately 20.5 million square feet of gross leasable area, of which 15.6 million square feet is owned by the Company and its real estate joint ventures. The properties are located in Michigan, Florida, Ohio, Georgia, Wisconsin, Illinois, Indiana, Virginia, New Jersey, Maryland, Tennessee and South Carolina. For additional information regarding Ramco-Gershenson Properties Trust visit the Company's website at www.rgpt.com.
 
This press release contains forward-looking statements with respect to the operation of certain of the Trust’s properties. Management of Ramco-Gershenson believes the expectations reflected in the forward-looking statements made in this press release are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary, the ongoing U.S. recession, the existing global credit and financial crisis and other changes in general economic and real estate conditions, changes in the interest rate environment and the availability of financing, adverse changes in the retail industry, our continuing to qualify as a REIT and other factors discussed in the Trust’s reports filed with the Securities and Exchange Commission.
 
 
 
 
 
 
Ramco-Gershenson Properties Trust
 
Consolidated Balance Sheets
 
As of March 31, 2011
 
(in thousands)
           
           
     
March 31,
  
December 31,
     
2011
  
2010
 
ASSETS
        
 
Income producing properties, at cost:
        
 
Land
  
$
112,224
    
$
114,814
  
 
Buildings and improvements
    
858,743
      
863,229
  
 
Less accumulated depreciation and amortization
    
(217,388
)
    
(213,919
)
 
Income producing properties, net
    
753,579
      
764,124
  
 
Construction in progress and land held for development or sale
(including $0 and $25,812 of consolidated variable interest entities, respectively)
    
95,361
      
95,906
  
 
Property held for sale
    
9,119
      
-
  
 
Net real estate
  
$
858,059
    
$
860,030
  
 
Equity investments in unconsolidated joint ventures
    
107,249
      
105,189
  
 
Cash and cash equivalents
    
12,697
      
10,175
  
 
Restricted cash
    
7,180
      
5,726
  
 
Accounts receivable, net
    
10,713
      
10,451
  
 
Notes receivable
    
3,000
      
3,000
  
 
Other assets, net
    
58,950
      
58,258
  
 
TOTAL ASSETS
  
$
1,057,848
    
$
1,052,829
  
           
 
LIABILITIES AND SHAREHOLDERS' EQUITY
        
 
Mortgages and notes payable:
        
 
Mortgages payable (including $0 and $4,605 of consolidated variable interest entities, respectively)
  
$
377,474
    
$
363,819
  
 
Mortgage payable related to property held for sale
    
9,555
      
-
  
 
Secured revolving credit facility
    
132,500
      
119,750
  
 
Secured term loan facility, including secured bridge loan
    
30,000
      
60,000
  
 
Junior subordinated notes
    
28,125
      
28,125
  
 
Total mortgages and notes payable
  
$
577,654
    
$
571,694
  
 
Capital lease obligation
    
6,567
      
6,641
  
 
Accounts payable and accrued expenses
    
23,944
      
24,986
  
 
Other liabilities
    
2,860
      
3,462
  
 
Distributions payable
    
6,785
      
6,680
  
 
TOTAL LIABILITIES
  
$
617,810
    
$
613,463
  
           
 
Ramco-Gershenson Properties Trust shareholders' equity:
        
 
Common shares of beneficial interest, $0.01 par, 45,000 shares authorized,
  
 
38,429 and 37,947 shares issued and outstanding as of March 31, 2011
  
 
and December 31, 2010, respectively
  
$
384
    
$
379
  
 
Additional paid-in capital
    
572,068
      
563,370
  
 
Accumulated distributions in excess of net income
    
(168,020
)
    
(161,476
)
 
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT
    
404,432
      
402,273
  
 
Noncontrolling interest
    
35,606
      
37,093
  
 
TOTAL SHAREHOLDERS' EQUITY
    
440,038
      
439,366
  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  
$
1,057,848
    
$
1,052,829
  
                   
 
 
 
 
 
           
 
Ramco-Gershenson Properties Trust
 
Consolidated Statements of Operations
 
For the Three Months Ended March 31, 2011
 
(in thousands, except per share data)
           
           
     
Three Months Ended March 31,
           
     
2011
  
2010
 
REVENUE
        
 
Minimum rent
  
$
20,634
    
$
20,035
  
 
Percentage rent
    
77
      
73
  
 
Recovery income from tenants
    
7,761
      
7,624
  
 
Other property income
    
1,518
      
1,217
  
 
Management and other fee income
    
992
      
1,121
  
 
TOTAL REVENUE
    
30,982
      
30,070
  
           
 
EXPENSES
        
 
Real estate taxes
    
4,375
      
4,402
  
 
Recoverable operating expense
    
4,378
      
3,891
  
 
Other non-recoverable operating expense
    
763
      
817
  
 
Depreciation and amortization
    
8,857
      
7,692
  
 
General and administrative
    
5,057
      
4,126
  
 
TOTAL EXPENSES
    
23,430
      
20,928
  
           
 
INCOME BEFORE OTHER INCOME AND EXPENSE, TAX AND DISCONTINUED OPERATIONS
    
7,552
      
9,142
  
           
 
OTHER INCOME AND EXPENSES
        
 
Other income (expense)
    
(210
)
    
(330
)
 
Gain on sale of real estate
    
156
      
-
  
 
Earnings from unconsolidated joint ventures
    
961
      
867
  
 
Interest expense
    
(8,759
)
    
(8,614
)
 
Impairment charge on unconsolidated joint ventures
    
-
      
(2,653
)
 
LOSS FROM CONTINUING OPERATIONS BEFORE TAX
    
(300
)
    
(1,588
)
 
Income tax (provision) benefit of taxable REIT subsidiaries
    
(59
)
    
143
  
 
LOSS FROM CONTINUING OPERATIONS
    
(359
)
    
(1,445
)
           
 
DISCONTINUED OPERATIONS
        
 
Income from operations
    
106
      
92
  
 
INCOME FROM DISCONTINUED OPERATIONS
    
106
      
92
  
           
 
NET LOSS
    
(253
)
    
(1,353
)
 
Net (income) loss attributable to noncontrolling partner interest
    
4
      
601
  
 
Net (income) loss attributable to noncontrolling OP unit holder interest
    
17
      
69
  
 
NET LOSS ATTRIBUTABLE TO RPT COMMON SHAREHOLDERS
  
$
(232
)
  
$
(683
)
           
 
EARNINGS (LOSS) PER COMMON SHARE, BASIC
        
 
Continuing operations
  
$
(0.01
)
  
$
(0.02
)
 
Discontinued operations
    
-
      
-
  
     
$
(0.01
)
  
$
(0.02
)
 
EARNINGS (LOSS) PER COMMON SHARE, DILUTED
        
 
Continuing operations
  
$
(0.01
)
  
$
(0.02
)
 
Discontinued operations
    
-
      
-
  
     
$
(0.01
)
  
$
(0.02
)
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
        
 
Basic
    
37,927
      
31,020
  
 
Diluted
    
38,226
      
31,020
  
                   
 
 
 
 
 
 
Ramco-Gershenson Properties Trust
 
Funds from Operations
 
For the Three Months Ended March 31, 2011
 
(in thousands, except per share data)
           
           
     
Three Months Ended March 31,
     
2011
  
2010
           
 
Net income (loss) attributable to RPT common shareholders(1)
  
$
(232
)
  
$
(683
)
 
Adjustments:
        
 
Rental property depreciation and amortization expense
    
8,733
      
7,585
  
 
Pro-rata share of real estate depreciation from unconsolidated joint ventures
    
1,623
      
1,676
  
 
Noncontrolling interest in Operating Partnership
    
(17
)
    
(69
)
 
FUNDS FROM OPERATIONS
  
$
10,107
    
$
8,509
  
 
Impairment charge on unconsolidated joint ventures
    
-
      
2,653
  
 
FUNDS FROM OPERATIONS, EXCLUDING IMPAIRMENT
  
$
10,107
    
$
11,162
  
           
 
Weighted average common shares
    
37,927
      
31,020
  
 
Shares issuable upon conversion of Operating Partnership units
    
2,899
      
2,902
  
 
Dilutive effect of securities
    
299
      
-
  
 
WEIGHTED AVERAGE EQUIVALENT SHARES OUTSTANDING, DILUTED
    
41,125
      
33,922
  
           
           
 
FUNDS FROM OPERATIONS, PER DILUTED SHARE
  
$
0.25
    
$
0.25
  
 
Impairment charge on unconsolidated joint ventures
    
-
      
0.08
  
 
FUNDS FROM OPERATIONS, EXCLUDING IMPAIRMENT, PER DILUTED SHARE
  
$
0.25
    
$
0.33
  
           
 
Dividend per common share
  
$
0.1633
    
$
0.1633
  
 
Payout ratio - FFO, excluding impairment (1)
    
66.4
%
    
49.6
%
           
           
 
(1) Net income (loss) attributable to RPT common shareholders for the three months ended March 31, 2010, includes other than temporary impairment of our equity investments in unconsolidated joint ventures of $2,653.
 
 
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. 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.
 
CONTACT:
Ramco-Gershenson Properties Trust
Dawn Hendershot, 248-592-6202
Director of Investor Relations and Corporate Communications
 

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