Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Gramercy Property Trust Inc. | v417224_8k.htm |
Exhibit 99.1
Contact:
Jon W. Clark
Chief Financial Officer
(212) 297-1000
-Or-
Brittany A. Sanders
Investor Relations
(212) 297-1000
Gramercy Property Trust Inc. Reports Second Quarter 2015 Financial Results
Highlights
| · | Generated Core FFO of $25.9 million or $0.45 per diluted common share for the second quarter of 2015. |
| · | Generated NAREIT defined funds from operations (“FFO”) of $22.4 million or $0.39 per diluted common share for the second quarter of 2015. |
| · | Generated adjusted funds from operations (“AFFO”) of $23.0 million or $0.40 per diluted common share for the second quarter of 2015. |
| · | Announced with Chambers Street Properties (NYSE:CSG) (“Chambers Street”) a definitive agreement to merge, with the combined company having an expected enterprise value of approximately $5.7 billion. The merger is expected to close in the fourth quarter of 2015. |
| · | In April 2015, raised $259.3 million of net proceeds through a public offering of 9,775,000 shares of common stock. |
| · | During the second quarter of 2015, acquired 16 properties in four separate transactions for a total purchase price of approximately $368.6 million (initial cap rate 6.6% and annualized straight-line cap rate 7.6%) with a weighted average lease term of 17.6 years. Includes the 10-asset Life Time Fitness Portfolio acquisition for approximately $300.5 million which closed on June 10, 2015. |
| · | In April 2015, Gramercy’s European Property Fund closed its first acquisition, the purchase and leaseback of a 430,000 square foot warehouse located in Neuwied, Germany and 100% leased to a leading German wholesaler of tires, wheels and rims. The property was acquired for approximately €21.0 million and partially funded with a new €12.0 million non-recourse first mortgage. |
| · | In May 2015, bifurcated the revolving loan portion of the unsecured credit facility into a $350.0 million U.S. dollar-denominated tranche and a $50.0 million foreign currency-denominated tranche. Subsequent to quarter end, exercised the accordion feature to expand the term loan portion of the facility from $200.0 million to $300.0 million and increased the revolver from $400.0 million to $500.0 million. |
| · | Subsequent to quarter end, acquired three additional properties for a total purchase price of approximately $100.4 million (7.1% initial cap rate; 7.9% annualized straight-line cap rate) with a weighted average lease term of 11.7 years. |
| 1 |
Summary
NEW YORK, N.Y. – August 5, 2015 – Gramercy Property Trust Inc. (NYSE: GPT) today reported a net loss to common stockholders of $1.8 million, or $0.03 per fully diluted common share, for the three months ended June 30, 2015. For the quarter, the Company generated FFO of $22.4 million, or $0.39 per fully diluted common share. FFO and net loss to common stockholders includes merger costs relating to the Chambers Street merger as well as property acquisition costs aggregating $3.5 million, or $0.06 per diluted common share for the three months ended June 30, 2015. For the quarter, the Company generated Core FFO of $25.9 million, or $0.45 per fully diluted common share. The Company generated AFFO of $23.0 million, or $0.40 per fully diluted common share, during the second quarter of 2015. A reconciliation of FFO, Core FFO and AFFO to net income available to common stockholders is included on page 11 of the press release.
The Company declared a second quarter 2015 dividend of $0.22 per common share, an increase of 10% over the prior quarter’s dividend. The common stock dividend was paid on July 15, 2015 to holders of record as of June 30, 2015.
For the second quarter of 2015, the Company recognized total revenues of approximately $54.1 million, an increase of 13.0% over total revenues of $47.9 million reported in the prior quarter.
Merger with Chambers Street
On July 1, 2015, the Company announced with Chambers Street a definitive agreement to merge, with the combined company having an expected enterprise value of approximately $5.7 billion. Under the terms of the agreement, the Company’s shareholders will receive 3.1898 shares of Chambers Street common stock for each share of the Company’s common stock they own. Upon closing, Chambers Street’s shareholders will own approximately 56% and the Company’s shareholders will own approximately 44% of the combined company. The merged company will be renamed Gramercy Property Trust and trade on the New York Stock Exchange under the ticker symbol “GPT.” The stock-for-stock transaction is expected to be tax-free to shareholders. The merger is expected to close in the fourth quarter of 2015.
This combination brings together two complementary portfolios focused on industrial and office real estate, comprising 288 properties and approximately 52 million square feet in major markets throughout the U.S. and Europe. The combined company is expected to have larger size and scale, broader tenant diversification, increased financial flexibility, and a more efficient operating platform to drive growth.
Following the close of the transaction, the combined company also intends to pursue the disposition of certain suburban office properties in order to reduce the level of these holdings to approximately 25% of its total portfolio over the long term. In addition, the combined company expects to continue to be an active acquirer of single-tenant net leases and properties.
| 2 |
Common Stock Offering
On April 14, 2015, the Company completed an underwritten public offering of 9,775,000 shares of its common stock, which includes the exercise in full by the underwriters of their option to purchase 1,275,000 additional shares of common stock. The shares of common stock were issued at a public offering price of $27.75 per share and the net proceeds from the offering were approximately $259.3 million. The Company used the net proceeds from the offering to repay outstanding borrowings under its revolving credit facility, which is generally used to fund real estate acquisitions.
Property Acquisitions & Sales
In the second quarter of 2015, the Company acquired 16 properties in four separate transactions for a total purchase price of approximately $368.6 million (6.6% initial cap rate; 7.6% annualized straight-line cap rate) with a weighted average lease term of approximately 17.6 years. These acquisitions included a sale leaseback transaction with Life Time Fitness for a portfolio of 10 single-tenant net lease assets (“Life Time Fitness Portfolio”) totaling approximately 1.3 million square feet for an aggregate purchase price of approximately $300.5 million.
Subsequent to quarter end, the Company acquired three additional properties for a total purchase price of approximately $100.4 million (7.1% initial cap rate; 7.9% annualized straight-line cap rate) with a weighted average lease term of approximately 11.7 years and assumed existing secured debt totaling approximately $12.8 million with a remaining term of 3.4 years until maturity. The properties consist of an 106,631 square foot cold storage facility located in Vernon, California (Los Angeles MSA) which is 100% leased to a producer of frozen desserts through June 2030; a 255,336 square foot headquarters warehouse located in Philadelphia, Pennsylvania leased to a distributor of packaging, paper, equipment and janitorial supplies through April 2026; and a 585,225 square foot bulk warehouse located in Fridley, Minnesota (Minneapolis MSA) leased to a global defense, security and aerospace company through October 2025.
| 3 |
The Company’s year-to-date 2015 Property acquisitions are summarized in the chart below:
| (Dollar amount in thousands) | ||||||||||||||||||||||||
| Purchase | Cash | S/L | ||||||||||||||||||||||
| Location | MSA | Property Type | Square Feet | Price | Occupancy | NOI | NOI | |||||||||||||||||
| Industrial Portfolio | ||||||||||||||||||||||||
| Oswego, IL | Chicago | Manufacturing | 74,960 | $ | 4,650 | 100 | % | $ | 394 | $ | 418 | |||||||||||||
| Denver, CO 1 | Denver | Warehouse | 84,973 | 7,118 | 100 | % | 587 | 587 | ||||||||||||||||
| Houston, TX 1, 2 | Houston | HQ / Flex Industrial | 465,475 | 45,050 | 100 | % | 3,893 | 3,893 | ||||||||||||||||
| Dixon, IL 1 | Greater Chicago | Bulk Warehouse | 575,448 | 23,263 | 100 | % | 1,714 | 1,939 | ||||||||||||||||
| Richfield, OH 1 | Cleveland | Warehouse | 229,972 | 21,764 | 100 | % | 1,815 | 1,721 | ||||||||||||||||
| Kent, WA | Seattle | HQ / Flex Industrial | 214,970 | 18,500 | 100 | % | 1,113 | 1,179 | ||||||||||||||||
| San Jose, CA | San Francisco | HQ / Flex Industrial | 207,006 | 44,000 | 100 | % | 2,785 | 3,038 | ||||||||||||||||
| Milwaukee, Oak Creek, Sussex, WI 3 | Milwaukee | Warehouse | 452,752 | 19,750 | 100 | % | 1,704 | 1,745 | ||||||||||||||||
| Cinnaminson, NJ | Philadelphia | Bulk Warehouse | 465,000 | 27,060 | 100 | % | 1,651 | 1,800 | ||||||||||||||||
| St. Louis, MO | St. Louis | Manufacturing | 211,000 | 10,610 | 100 | % | 833 | 844 | ||||||||||||||||
| Orlando, FL | Orlando | Warehouse | 92,616 | 8,160 | 100 | % | 831 | 881 | ||||||||||||||||
| Orlando, FL | Orlando | Warehouse | 141,668 | 7,740 | 100 | % | 547 | 590 | ||||||||||||||||
| Aubun, WA | Seattle | Manufacturing | 109,585 | 13,000 | 100 | % | 828 | 899 | ||||||||||||||||
| San Bernardino, CA | Inland Empire | Manufacturing | 69,452 | 11,086 | 100 | % | 720 | 817 | ||||||||||||||||
| Fairfield, CA | San Francisco | HQ / Flex Industrial | 59,000 | 4,000 | 100 | % | 300 | 300 | ||||||||||||||||
| Obetz, OH | Columbus | Bulk Warehouse | 478,053 | 24,100 | 100 | % | 1,664 | 1,768 | ||||||||||||||||
| Data Centers | ||||||||||||||||||||||||
| El Segundo, CA 1 | Los Angeles | Data Center | 106,885 | $ | 59,122 | 100 | % | $ | 3,753 | $ | 4,261 | |||||||||||||
| Richardson, TX 1 | Dallas | Data Center | 121,068 | 16,072 | 100 | % | 1,143 | 987 | ||||||||||||||||
| Office/Banking Center Portfolio | ||||||||||||||||||||||||
| Burbank, CA | Los Angeles | Flex Office | 95,000 | $ | 22,200 | 100 | % | $ | 1,539 | $ | 1,774 | |||||||||||||
| Irving, TX 1 | Dallas | Office | 293,890 | 64,051 | 100 | % | 5,130 | 5,810 | ||||||||||||||||
| Plantation, FL 1, 4 | Miami / Ft. Lauderdale | Office | 239,616 | 52,025 | 100 | % | 3,966 | 4,149 | ||||||||||||||||
| Parsippany, NJ 1 | New York/New Jersey | Office | 212,535 | 37,586 | 100 | % | 3,439 | 3,439 | ||||||||||||||||
| Newbury Park, CA 1 | Los Angeles | Office | 106,560 | 18,426 | 100 | % | 1,381 | 1,583 | ||||||||||||||||
| Commerce, CA 1 | Los Angeles | Office | 108,000 | 25,479 | 100 | % | 2,267 | 2,267 | ||||||||||||||||
| Redondo Beach, CA 1 | Los Angeles | Office | 124,400 | 28,680 | 100 | % | 2,385 | 2,505 | ||||||||||||||||
| Charlotte, NC | Charlotte | Flex Office | 113,600 | 18,200 | 100 | % | 1,224 | 1,361 | ||||||||||||||||
| Specialty Industrial Portfolio | ||||||||||||||||||||||||
| Milford, CT | New Haven | Truck Terminal | 24,700 | $ | 6,400 | 100 | % | $ | 463 | $ | 456 | |||||||||||||
| Specialty Retail Portfolio | ||||||||||||||||||||||||
| Summerlin, NV | Las Vegas | Fitness Center | 143,286 | $ | 45,500 | 100 | % | $ | 2,958 | $ | 3,431 | |||||||||||||
| Colorado Spring, CO | Colorado Springs | Fitness Center | 179,175 | 36,000 | 100 | % | 2,340 | 2,715 | ||||||||||||||||
| Centennial, CO | Denver | Fitness Center | 129,182 | 32,000 | 100 | % | 2,080 | 2,413 | ||||||||||||||||
| Reston, VA | Baltimore/Washington | Fitness Center | 114,441 | 33,000 | 100 | % | 2,145 | 2,489 | ||||||||||||||||
| Canton, MI | Detroit | Fitness Center | 105,010 | 26,000 | 100 | % | 1,690 | 1,961 | ||||||||||||||||
| Deerfield Township, OH | Cincinnati | Fitness Center | 127,040 | 24,800 | 100 | % | 1,612 | 1,870 | ||||||||||||||||
| Eden Prairie, MN | Minneapolis | Fitness Center | 176,704 | 23,200 | 100 | % | 1,508 | 1,750 | ||||||||||||||||
| Collierville, TN | Memphis | Fitness Center | 112,110 | 27,500 | 100 | % | 1,788 | 2,074 | ||||||||||||||||
| Bixby, OK | Tulsa | Fitness Center | 114,441 | 25,500 | 100 | % | 1,658 | 1,923 | ||||||||||||||||
| Mansfield, TX | Dallas | Fitness Center | 129,155 | 27,000 | 100 | % | 1,755 | 2,036 | ||||||||||||||||
| 6,808,728 | $ | 938,592 | 100 | % | $ | 67,603 | $ | 73,673 | ||||||||||||||||
| Closed Since Quarter End | ||||||||||||||||||||||||
| Fridley, MN | Minneapolis | Manufacturing | 585,225 | $ | 46,800 | 100 | % | $ | 3,401 | $ | 3,716 | |||||||||||||
| Philadelphia, PA | Philadelphia | Bulk Warehouse | 255,336 | 26,100 | 100 | % | 1,907 | 2,080 | ||||||||||||||||
| Vernon, CA | Los Angeles | Cold Storage | 106,631 | 27,500 | 100 | % | 1,791 | 2,003 | ||||||||||||||||
| 947,192 | $ | 100,400 | 100 | % | $ | 7,099 | $ | 7,799 | ||||||||||||||||
| (1) | Denotes assets in the Dividend Capital portfolio acquisition. |
| (2) | Portfolio includes four separate properties. |
| (3) | Portfolio includes three separate properties. |
| (4) | Portfolio includes two separate properties. |
During the second quarter of 2015, in three separate transactions, the Company disposed of three non-strategic assets acquired as a part of the Bank of America Portfolio. The assets were 100% leased at time of sale. The three assets totaled 85,866 square feet and were sold for aggregate proceeds of approximately $8.6 million.
| 4 |
Gramercy European Property Fund
For the second quarter of 2015, the Company contributed $2.0 million to the Gramercy European Property Fund (“the Fund”). In April 2015, the Fund closed its first acquisition, the purchase and sale leaseback of an approximately 430,000 square foot industrial warehouse located in Neuwied, Germany. The property is 100% leased to a leading German wholesaler of tires, rims and wheels. The property was acquired for approximately €21.0 million. In addition, the Fund secured a €12.0 million non-recourse senior mortgage financing. The Company funded its prorata share of the acquisition of $1.6 million in April 2015. The Fund did not contribute a significant amount to the Company’s earnings in the second quarter of 2015.
Gramercy Asset Management
The Company’s asset and property management business, which operates under the name Gramercy Asset Management, currently manages for third parties approximately $800.0 million of commercial properties throughout the United States and Europe.
In the second quarter 2015, Gramercy Asset Management recognized fee revenues of $4.2 million in property management, asset management, incentive, and administrative fees, as compared to $8.2 million at the end of the prior quarter. The decrease in fees is primarily attributable to additional incentive and disposition fees recognized in the first quarter of 2015 on properties sold in the managed portfolio. The Gramercy Asset Management business generates most of its fee revenues from an asset management agreement with KBS.
Corporate
As of June 30, 2015, the Company maintained approximately $93.6 million of liquidity at quarter end, as compared to approximately $188.7 million of liquidity reported the prior quarter. Liquidity includes $43.6 million of unrestricted cash as compared to approximately $23.7 million reported at the end of the prior quarter. As of June 30, 2015, there were borrowings of $200.0 million outstanding under the term loan (“Term Loan”) and $350.0 million outstanding under the unsecured credit facility (“Credit Facility”).
In May 2015, the Company amended the Credit Facility to bifurcate the revolving loan portion into a $350.0 million U.S. dollar-denominated tranche and a $50.0 million foreign currency-denominated tranche. Subsequent to quarter end, the Company exercised the accordion feature to expand the Term Loan from $200.0 million to $300.0 million and increased the Credit Facility from $400.0 million to $500.0 million.
Management, general and administrative (“MG&A”) expenses were $4.8 million for the quarter ended June 30, 2015, approximately the same as the prior quarter. The Company’s MG&A expenses were related to the following business lines:
| (Dollar amount in thousands) | Three Months Ended | |||||||
| June 30, | March 31, | |||||||
| 2015 | 2015 | |||||||
| Corporate / Investments | $ | 4,642 | $ | 4,596 | ||||
| Asset Management | 136 | 177 | ||||||
| Total | $ | 4,778 | $ | 4,773 | ||||
| 5 |
MG&A expenses includes non-cash stock compensation costs of approximately $727 thousand for the three months ended June 30, 2015.
Dividends
The Board of Directors authorized and the Company declared a dividend of $0.22 per common share for the second quarter of 2015, a 10% increase over the prior quarter. The second quarter dividend was paid on July 15, 2015 to holders of record as of June 30, 2015.
The Board of Directors also authorized and the Company declared the Series B preferred stock quarterly dividend for the period of $0.44531 per share. The preferred stock dividend was paid on June 30, 2015 to holders of record as of June 19, 2015.
Company Profile
Gramercy Property Trust Inc. is a leading global investor and asset manager of commercial real estate. The Company specializes in acquiring and managing single-tenant, net-leased industrial and office properties purchased through sale leaseback transactions or directly from property developers and owners. The Company focuses on income producing properties leased to high quality tenants in major markets in the United States and Europe. The Company is organized as a Real Estate Investment Trust.
To review the Company’s latest news releases and other corporate documents, please visit the Company's website at www.gptreit.com or contact Investor Relations at (212) 297-1000.
| 6 |
Conference Call
The Company's executive management team will host a conference call and audio webcast on Wednesday, August 5, 2015 at 2:00 PM EDT to discuss second quarter 2015 financial results. Presentation materials will be posted prior to the call on the Company’s website, www.gptreit.com.
Interested parties may access the live call by dialing (877) 264-6786 or for international participants (412) 542-4146, using confirmation code “Gramercy Property Trust GPT Call.” Additionally, the live call will be webcast in listen-only mode on Gramercy’s website at www.gptreit.com in the Investor Relations section.
A replay of the call will be available from Wednesday, August 5, 2015 at 4:00 PM EDT through midnight, August 19, 2015 by dialing (877) 344-7529 or for international participants (412) 317-0088, using pass code 10069969.
| 7 |
Selected Financial Data:
Gramercy Property Trust Inc.
Condensed Consolidated Balance Sheets
(Unaudited, dollar amounts in thousands, except per share data)
| June 30, 2015 | December 31, 2014 | |||||||
| Assets: | ||||||||
| Real estate investments, at cost: | ||||||||
| Land | $ | 418,161 | $ | 239,503 | ||||
| Building and improvements | 1,600,471 | 828,117 | ||||||
| Less: accumulated depreciation | (51,773 | ) | (27,598 | ) | ||||
| Total real estate investments, net | 1,966,859 | 1,040,022 | ||||||
| Cash and cash equivalents | 43,595 | 200,069 | ||||||
| Restricted cash | 8,502 | 1,244 | ||||||
| Joint ventures and equity investments | 2,552 | - | ||||||
| Assets held for sale, net | 18,011 | - | ||||||
| Servicing advances receivable | 1,505 | 1,485 | ||||||
| Retained CDO bonds | 10,705 | 4,293 | ||||||
| Tenant and other receivables, net | 22,206 | 15,398 | ||||||
| Acquired lease assets, net of accumulated amortization of $34,561 and $15,168 | 328,719 | 200,231 | ||||||
| Deferred costs, net of accumulated amortization of $3,369 and $1,908 | 13,016 | 10,355 | ||||||
| Goodwill | 3,805 | 3,840 | ||||||
| Other assets | 18,351 | 23,063 | ||||||
| Total assets | $ | 2,437,826 | $ | 1,500,000 | ||||
| Liabilities and Equity: | ||||||||
| Liabilities: | ||||||||
| Exchangeable senior notes, net | $ | 108,605 | $ | 107,836 | ||||
| Senior unsecured term loan | 200,000 | 200,000 | ||||||
| Unsecured credit facility | 350,000 | - | ||||||
| Mortgage notes payable | 308,543 | 161,642 | ||||||
| Total long term debt | 967,148 | 469,478 | ||||||
| Accounts payable and accrued expenses | 17,056 | 18,806 | ||||||
| Dividends payable | 12,924 | 9,579 | ||||||
| Accrued interest payable | 3,414 | 2,357 | ||||||
| Deferred revenue | 16,036 | 11,592 | ||||||
| Below-market lease liabilities, net of accumulated amortization of $11,662 and $3,961 | 227,755 | 53,826 | ||||||
| Derivative instruments, at fair value | 3,853 | 3,189 | ||||||
| Other liabilities | 7,581 | 8,263 | ||||||
| Total liabilities | 1,255,767 | 577,090 | ||||||
| Commitments and contingencies | - | - | ||||||
| Noncontrolling interest in the Operating Partnership | 11,277 | 16,129 | ||||||
| Equity: | ||||||||
| Common stock, par value $0.001, 200,000,000 and 220,000,000 shares authorized, and 57,396,418 and 46,736,392 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively. | 57 | 47 | ||||||
| Series B cumulative redeemable preferred stock, par value $0.001, liquidation preference $87,500, 3,500,000 shares authorized, issued and outstanding at June 30, 2015 and December 31, 2014. | 84,394 | 84,394 | ||||||
| Additional paid-in-capital | 2,053,265 | 1,768,977 | ||||||
| Accumulated other comprehensive income (loss) | 1,445 | (3,703 | ) | |||||
| Accumulated deficit | (968,516 | ) | (942,934 | ) | ||||
| Total stockholders’ equity | 1,170,645 | 906,781 | ||||||
| Noncontrolling interest in other partnerships | 137 | - | ||||||
| Total equity | 1,170,782 | 906,781 | ||||||
| Total liabilities and equity | $ | 2,437,826 | $ | 1,500,000 | ||||
| 8 |
Gramercy Property Trust Inc.
Condensed Consolidated Statements of Operations
(Unaudited, dollar amounts in thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenues | ||||||||||||||||
| Rental revenue | $ | 39,565 | $ | 10,276 | $ | 70,755 | $ | 17,770 | ||||||||
| Management fees | 4,232 | 7,054 | 12,418 | 14,019 | ||||||||||||
| Operating expense reimbursements | 9,738 | 2,697 | 17,876 | 3,378 | ||||||||||||
| Investment income | 525 | 525 | 763 | 901 | ||||||||||||
| Other income | 87 | 76 | 270 | 144 | ||||||||||||
| Total revenues | 54,147 | 20,628 | 102,082 | 36,212 | ||||||||||||
| Expenses | ||||||||||||||||
| Property operating expenses: | ||||||||||||||||
| Property management expenses | 4,611 | 4,981 | 9,777 | 10,225 | ||||||||||||
| Property operating expenses | 9,572 | 2,858 | 17,955 | 3,680 | ||||||||||||
| Total property operating expenses | 14,183 | 7,839 | 27,732 | 13,905 | ||||||||||||
| Depreciation and amortization | 24,716 | 6,760 | 43,414 | 10,145 | ||||||||||||
| Interest expense | 7,728 | 3,791 | 13,998 | 6,136 | ||||||||||||
| Realized loss on derivative instruments | - | 3,415 | - | 3,300 | ||||||||||||
| Management, general and administrative | 4,778 | 4,497 | 9,551 | 8,839 | ||||||||||||
| Acquisition and merger related expenses | 3,455 | 1,688 | 6,961 | 1,923 | ||||||||||||
| Total expenses | 54,860 | 27,990 | 101,656 | 44,248 | ||||||||||||
| Income (loss) from continuing operations before equity in net income from joint ventures and equity investments, gain on remeasurement of previously held joint venture, loss on extinguishment of debt, net gains on disposals, and provision for taxes | (713 | ) | (7,362 | ) | 426 | (8,036 | ) | |||||||||
| Equity in net income of joint ventures and equity investments | 123 | 1,125 | 122 | 1,753 | ||||||||||||
| Income (loss) from continuing operations before gain on remeasurement of previously held joint venture, loss on extinguishment of debt, net gains on disposals, provision for taxes, and discontinued operations | (590 | ) | (6,237 | ) | 548 | (6,283 | ) | |||||||||
| Gain on remeasurement of previously held joint venture | - | 72,345 | - | 72,345 | ||||||||||||
| Loss on extinguishment of debt | - | (1,925 | ) | - | (1,925 | ) | ||||||||||
| Net gains on disposals | 201 | - | 201 | - | ||||||||||||
| Provision for taxes | (17 | ) | (437 | ) | (1,131 | ) | (806 | ) | ||||||||
| Income (loss) from continuing operations | (406 | ) | 63,746 | (382 | ) | 63,331 | ||||||||||
| Income (loss) from discontinued operations | 120 | (395 | ) | 58 | (481 | ) | ||||||||||
| Net income (loss) | (286 | ) | 63,351 | (324 | ) | 62,850 | ||||||||||
| Net loss attributable to noncontrolling interest | 21 | - | 63 | - | ||||||||||||
| Net income (loss) attributable to Gramercy Property Trust Inc. | (265 | ) | 63,351 | (261 | ) | 62,850 | ||||||||||
| Preferred stock dividends | (1,558 | ) | (1,791 | ) | (3,117 | ) | (3,581 | ) | ||||||||
| Net income (loss) available to common stockholders | $ | (1,823 | ) | $ | 61,560 | $ | (3,378 | ) | $ | 59,269 | ||||||
| Basic earnings per share: | ||||||||||||||||
| Net income (loss) from continuing operations, after preferred dividends | $ | (0.03 | ) | $ | 2.67 | $ | (0.07 | ) | $ | 2.91 | ||||||
| Net income (loss) from discontinued operations | - | (0.02 | ) | - | (0.02 | ) | ||||||||||
| Net income (loss) available to common stockholders | $ | (0.03 | ) | $ | 2.65 | $ | (0.07 | ) | $ | 2.89 | ||||||
| Diluted earnings per share: | ||||||||||||||||
| Net income (loss) from continuing operations, after preferred dividends | $ | (0.03 | ) | $ | 2.61 | $ | (0.07 | ) | $ | 2.83 | ||||||
| Net income (loss) from discontinued operations | - | (0.02 | ) | - | (0.02 | ) | ||||||||||
| Net income (loss) available to common stockholders | $ | (0.03 | ) | $ | 2.59 | $ | (0.07 | ) | $ | 2.81 | ||||||
| Basic weighted average common shares outstanding | 55,612,741 | 23,188,500 | 51,204,638 | 20,529,075 | ||||||||||||
| Diluted weighted average common shares and common share equivalents outstanding | 55,612,741 | 23,771,868 | 51,204,638 | 21,112,594 | ||||||||||||
| 9 |
| Gramercy Property Trust Inc. | |||||||||||
| Earnings per Share | |||||||||||
| (Amounts in thousands, except share and per share data) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Numerator - Income (loss): | ||||||||||||||||
| Net income (loss) from continuing operations | $ | (406 | ) | $ | 63,746 | $ | (382 | ) | $ | 63,331 | ||||||
| Net income (loss) from discontinued operations | 120 | (395 | ) | 58 | (481 | ) | ||||||||||
| Net income (loss) | (286 | ) | 63,351 | (324 | ) | 62,850 | ||||||||||
| Net loss attributable to noncontrolling interest | 21 | - | 63 | - | ||||||||||||
| Preferred stock dividends | (1,558 | ) | (1,791 | ) | (3,117 | ) | (3,581 | ) | ||||||||
| Net income (loss) available to common stockholders | $ | (1,823 | ) | $ | 61,560 | $ | (3,378 | ) | $ | 59,269 | ||||||
| Denominator-Weighted average shares: | ||||||||||||||||
| Weighted average basic shares outstanding | 55,612,741 | 23,188,500 | 51,204,638 | 20,529,075 | ||||||||||||
| Effect of dilutive securities: | ||||||||||||||||
| Unvested share based payment awards | - | 425,708 | - | 425,708 | ||||||||||||
| Options | - | 15,983 | - | 16,134 | ||||||||||||
| Phantom stock units | - | 141,677 | - | 141,677 | ||||||||||||
| OP Units | - | - | - | - | ||||||||||||
| Exchangeable Senior Notes | - | - | - | - | ||||||||||||
| Diluted Shares | 55,612,741 | 23,771,868 | 51,204,638 | 21,112,594 | ||||||||||||
| 10 |
| Gramercy Property Trust Inc. | |||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||
| (Amounts in thousands, except per share data) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net income (loss) available to common shareholders | $ | (1,823 | ) | $ | 61,560 | $ | (3,378 | ) | $ | 59,269 | ||||||
| Add: | ||||||||||||||||
| Depreciation and amortization | 24,716 | 6,760 | 43,414 | 10,145 | ||||||||||||
| FFO adjustments for unconsolidated joint ventures | 121 | 1,661 | 199 | 3,952 | ||||||||||||
| Net loss attributed to noncontrolling interest | (21 | ) | - | (63 | ) | - | ||||||||||
| Income (loss) from discontinued operations | (120 | ) | 395 | (58 | ) | 481 | ||||||||||
| Less: | ||||||||||||||||
| Non real estate depreciation and amortization | (223 | ) | (220 | ) | (439 | ) | (376 | ) | ||||||||
| Gain on remeasurement of previously held joint venture | - | (72,345 | ) | - | (72,345 | ) | ||||||||||
| Net gain from disposals | (201 | ) | - | (201 | ) | - | ||||||||||
| Funds from operations available to Gramercy Property Trust Inc. | $ | 22,449 | $ | (2,189 | ) | $ | 39,474 | $ | 1,126 | |||||||
| Add: | ||||||||||||||||
| Acquisition costs | 1,102 | 1,688 | 4,608 | 1,923 | ||||||||||||
| Merger related costs | 2,353 | - | 2,353 | - | ||||||||||||
| Loss on extinguishment of debt | - | 1,925 | - | 1,925 | ||||||||||||
| Loss (gain) on derivative instruments | - | 3,415 | - | 3,300 | ||||||||||||
| European Fund setup costs | - | - | 221 | - | ||||||||||||
| Core funds from operations, before discontinued operations | $ | 25,904 | $ | 4,839 | $ | 46,656 | $ | 8,274 | ||||||||
| Add: | ||||||||||||||||
| Non-cash stock-based compensation expense | 849 | 516 | 1,683 | 1,042 | ||||||||||||
| Amortization of market lease assets | 1,063 | 360 | 1,933 | 599 | ||||||||||||
| Amortization of deferred financing costs and non-cash interest | 291 | 925 | 866 | 1,278 | ||||||||||||
| Amortization of lease inducement costs | 52 | 44 | 96 | 88 | ||||||||||||
| Return on construction advances | - | 173 | - | 358 | ||||||||||||
| Non-real estate depreciation and amortization | 223 | 220 | 439 | 376 | ||||||||||||
| Amortization of free rent received at property acquisition | 1,146 | 223 | 1,725 | 223 | ||||||||||||
| Less: | ||||||||||||||||
| AFFO adjustments for joint ventures | (1 | ) | (321 | ) | (2 | ) | (773 | ) | ||||||||
| Straight-lined rent | (3,312 | ) | (916 | ) | (5,484 | ) | (1,732 | ) | ||||||||
| Amortization of market lease liabilities | (3,178 | ) | (514 | ) | (8,000 | ) | (674 | ) | ||||||||
| Adjusted Funds from Operations | $ | 23,037 | $ | 5,549 | $ | 39,912 | $ | 9,059 | ||||||||
| Funds from operations per share - basic | $ | 0.40 | $ | (0.10 | ) | $ | 0.76 | $ | 0.05 | |||||||
| Funds from operations per share - diluted | $ | 0.39 | $ | (0.10 | ) | $ | 0.74 | $ | 0.05 | |||||||
| Core funds from operations per share - basic | $ | 0.46 | $ | 0.21 | $ | 0.90 | $ | 0.40 | ||||||||
| Core funds from operations per share - diluted | $ | 0.45 | $ | 0.20 | $ | 0.88 | $ | 0.39 | ||||||||
| Adjusted funds from operations per share - basic | $ | 0.41 | $ | 0.24 | $ | 0.77 | $ | 0.44 | ||||||||
| Adjusted funds from operations per share - diluted | $ | 0.40 | $ | 0.23 | $ | 0.75 | $ | 0.43 | ||||||||
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Gramercy Property Trust Inc.
Reconciliation of Non-GAAP Financial Measure - continued
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Basic weighted average common shares outstanding - EPS | 55,612,741 | 23,188,500 | 51,204,638 | 20,529,075 | ||||||||||||
| LTIPs - unvested & earned | 94,523 | - | 94,523 | - | ||||||||||||
| Weighted average non-vested share based payment awards | 170,634 | - | 166,939 | - | ||||||||||||
| Weighted average op units | 485,374 | - | 509,247 | - | ||||||||||||
| Weighted average common shares and units outstanding | 56,363,272 | 23,188,500 | 51,975,347 | 20,529,075 | ||||||||||||
| Diluted weighted average common shares and common share equivalents outstanding - EPS1 | 55,612,741 | 23,771,454 | 51,204,638 | 21,112,594 | ||||||||||||
| Weighted average non-vested share based payment awards | 692,806 | - | 689,111 | - | ||||||||||||
| Weighted average stock options | 15,064 | - | 15,381 | - | ||||||||||||
| Phantom stock units | 154,594 | - | 154,594 | - | ||||||||||||
| Dilution effect of exchangeable senior notes | 347,297 | 446,765 | - | |||||||||||||
| Weighted average partnership units held by noncontrolling interest | 485,374 | - | 509,247 | - | ||||||||||||
| Diluted weighted average common shares and units outstanding | 57,307,876 | 23,771,454 | 53,019,736 | 21,112,594 | ||||||||||||
(1) For the three and six months ended June 30, 2015, the diluted weighted average calculation, which is the denominator in diluted earnings per share excludes potentially dilutive securities because they would have been anti-dilutive during those periods. The denominator for diluted earnings per share, Core FFO per diluted share and AFFO per diluted share for the three and six months ended June 30, 2014 are the same. However, FFO per diluted share for the three months ended June 30, 2014 does not include potentially dilutive securities, while FFO per diluted share for the six months ended June 30, 2014, includes potentially dilutive securities.
Disclaimers
Non-GAAP Financial Measures
The Company has used non-GAAP financial measures as defined by SEC Regulation G in this press release. A reconciliation of each non-GAAP financial measure and the comparable GAAP financial measure can be found on page 11 of this release.
Fund from operations (“FFO”): The revised White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (loss) (determined in accordance with GAAP), excluding impairment write-downs of investments in depreciable real estate and investments in in-substance real estate investments, gains or losses from debt restructurings and sales of depreciable operating properties, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs), less distributions to non-controlling interests and gains/losses from discontinued operations and after adjustments for unconsolidated partnerships and joint ventures.
Core FFO and adjusted funds from operations (“AFFO”): Core FFO and AFFO are presented excluding property acquisition costs, other-than-temporary impairments on retained bonds and other one-time charges. AFFO of the Company also excludes non-cash stock-based compensation expense, amortization of above and below market leases, amortization of deferred financing costs, amortization of lease inducement costs, non-real estate depreciation and amortization, amortization of free rent received at property acquisition and straight-line rent. The Company believes that Core FFO and AFFO are useful supplemental measures regarding the Company’s operating performances as they provide a more meaningful and consistent comparison of the Company’s operating performance and allows investors to more easily compare the Company’s operating results.
FFO, Core FFO and AFFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, or to cash flow from operating activities as a measure of our liquidity, nor is it entirely indicative of funds available to fund our cash needs, including our ability to make cash distributions. Our calculation of FFO may be different from the calculation used by other companies and, therefore, comparability may be limited.
Forward-looking Information
This press release contains forward-looking information based upon the Company's current best judgment and expectations. Actual results could vary from those presented herein. The risks and uncertainties associated with forward-looking information in this release include, but are not limited to, factors that are beyond the Company's control, including the factors listed in the Company's Annual Report on Form 10-K, in the Company's Quarterly Reports on Form 10-Q and in the Company's Current Reports on Form 8-K. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For further information, please refer to the Company's filings with the Securities and Exchange Commission.
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