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Ramco-Gershenson Properties Trust Reports Financial and Operating Results for the Fourth Quarter and Year-End 2014

FARMINGTON HILLS, Mich., Feb. 10, 2015 (GLOBE NEWSWIRE) -- Ramco-Gershenson Properties Trust (NYSE:RPT) today announced its financial and operating results for the three and twelve months ended December 31, 2014.

FULL YEAR 2014 HIGHLIGHTS:

  • Reported Operating Funds from Operations ("Operating FFO") of $1.27 per diluted share, compared to $1.19 for the comparable period in 2013.
  • Increased same-center net operating income ("NOI") by 3.3%.
  • Signed 345 leases encompassing 2.3 million square feet at comparable rental growth of 6.3%.
  • Increased annual dividend by 7%, to $0.80 per share.
  • Ended 2014 with core portfolio leased occupancy of 95.5%.

"During 2014, we continued our success in significantly improving our shopping center portfolio supported by the further diversification of our markets, the achievement of an even stronger demographic profile, and producing higher average base rents. All of these factors are contributing to predictable, strong same-center NOI growth," said Dennis Gershenson, President and Chief Executive Officer. "In 2015, our primary focus will be on driving quality through redeveloping and re-leasing of our core portfolio and the continued sale of non-core properties."

FINANCIAL RESULTS:

For the three months ended December 31, 2014:

  • Operating FFO of $29.1 million, or $0.33 per diluted share, compared to $21.8 million or $0.30 per diluted share for the same period in 2013.
  • Funds from Operations ("FFO") of $3.8 million, or $0.05 per diluted share, compared to $20.6 million, or $0.28 per diluted share for the same period in 2013. FFO for the fourth quarter of 2014 was reduced as the result of a non-cash impairment charge of approximately $23.3 million related to land available for development or sale.
  • Net loss available to common shareholders of $14.0 million, or $0.18 per diluted share, compared to $7.0 million, or $0.11 per diluted share for the same period in 2013.

For the twelve months ended December 31, 2014:

  • Operating FFO of $103.5 million, or $1.27 per diluted share, compared to $81.9 million, or $1.19 per diluted share for the same period in 2013.
  • FFO of $70.3 million, or $0.94 per diluted share, compared to $79.9 million, or $1.16 per diluted share for the same period in 2013. FFO for 2014 was reduced as the result of non-cash impairment charge of approximately $23.3 million related to land available for development or sale.
  • Net loss available to common shareholders of $9.6 million, or $0.14 per diluted share, compared to net income available to common shareholders of $3.7 million, or $0.06 per diluted share for the same period in 2013.

FOURTH QUARTER OPERATING RESULTS:

  • Same-center NOI growth of 2.8%.
  • Core portfolio leased occupancy of 95.5% and physical occupancy of 94.9%.
  • Signed 86 leases encompassing approximately 0.5 million square feet at comparable rental growth of 8.1%, including 56 renewals totaling approximately 0.3 million square feet at comparable rental growth of 7.7%.

YEAR-END BALANCE SHEET METRICS:

  • Net debt to total market capitalization of 35.7%.
  • Net debt to EBITDA of 5.9x, interest coverage of 3.9x, and fixed charge coverage of 3.0x.
  • Weighted average term of debt to maturity of 6.5 years.

INVESTMENT ACTIVITY:

Acquisitions and Dispositions

During the fourth quarter, the Company sold three non-core shopping centers for $23.1 million: Northwest Crossing, a 124,000 square foot shopping center anchored by Ross Dress for Less, HH Gregg, and OfficeMax, in Knoxville, Tennessee; Fraser Shopping Center, a 68,000 square foot shopping center anchored by Oakridge Market and Family Dollar in Fraser, Michigan and Lake Orion Plaza, a 141,000 square foot shopping center anchored by Kmart and Hollywood Market. Proceeds from the sales were used to reduce debt and fund the Company's expansion and redevelopment projects.

In 2014, the Company acquired $321.9 million of high-quality shopping centers in the targeted metropolitan markets of Cincinnati, Minneapolis, and Fort Collins. The shopping centers encompass over 1.5 million square feet and are anchored by a number of leading retailers, including Whole Foods, Dick's Sporting Goods, Sprouts Market, Home Depot, Bed Bath & Beyond, and buy buy Baby. Also during the year, the Company sold $32.0 million of non-core shopping centers.

Development and Redevelopment

During 2014, the Company initiated a number of new value-add redevelopment projects. At December 31, 2014, the Company's redevelopment and development pipeline consisted of eight projects with an estimated total cost of $56.5 million.

FINANCING ACTIVITY:

During the quarter, the Company closed a $100 million private placement of senior unsecured notes. The financing consists of $50 million of notes with a ten-year term priced at a fixed interest rate of 4.16% and $50 million of notes with a twelve-year term priced at a fixed interest rate of 4.30%.

DIVIDEND:

During the fourth quarter, the Company declared a regular cash dividend of $0.20 per common share for the period October 1, 2014 through December 31, 2014 and a Series D convertible perpetual preferred share dividend of $0.90625 per share for the same period. The dividends were paid on January 2, 2015 to shareholders of record as of December 19, 2014. The Operating FFO payout ratio was 61.0%.

2015 GUIDANCE:

The Company has affirmed its 2015 guidance for Operating FFO to $1.27 to $1.33 per diluted share.

CONFERENCE CALL/WEBCAST:

Ramco-Gershenson Properties Trust will host a live broadcast of its fourth quarter conference call on Wednesday, February 11, 2015 at 9:00 a.m. eastern time, to discuss its financial and operating results. The live broadcast will be available on-line at www.rgpt.com and www.investorcalendar.com and also by telephone at (877) 407-9205, no pass code needed. A replay will be available shortly after the call on the aforementioned websites (for ninety days) or by telephone at (877) 660-6853, (Conference ID: 13598785), for one week.

SUPPLEMENTAL MATERIALS:

The Company's quarterly financial and operating supplement is available on its corporate web site at www.rgpt.com. If you wish to receive a copy via email, please send requests to dhendershot@rgpt.com.

ABOUT RAMCO-GERSHENSON PROPERTIES TRUST:

Ramco-Gershenson Properties Trust (NYSE:RPT) is a fully integrated, self-administered, publicly-traded real estate investment trust (REIT) based in Farmington Hills, Michigan. The Company's business is the ownership and management of large, multi-anchor shopping centers primarily in a dozen of the largest metropolitan markets in the United States. At December 31, 2014, the Company owned interest in and managed a portfolio of 80 shopping centers and one office building with approximately 16.9 million square feet of gross leasable area. At December 31, 2014, the Company's core operating portfolio was 95.5% leased. Additional information regarding the Company is available on its corporate website: www.rgpt.com.

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

RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
December 31,
2014 2013
ASSETS
Income producing properties, at cost:
Land $ 341,388 $ 284,686
Buildings and improvements 1,592,644 1,340,531
Less accumulated depreciation and amortization (287,177) (253,292)
Income producing properties, net 1,646,855 1,371,925
Construction in progress and land available for development or sale 74,655 101,974
Net real estate 1,721,510 1,473,899
Equity investments in unconsolidated joint ventures 28,733 30,931
Cash and cash equivalents 9,335 5,795
Restricted cash 8,163 3,454
Accounts receivable, net 11,997 9,648
Other assets, net 168,641 128,521
TOTAL ASSETS $ 1,948,379 $ 1,652,248
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable:
Senior unsecured notes payable $ 520,000 $ 365,000
Mortgages payable 363,580 333,049
Unsecured revolving credit facility 10,000 27,000
Junior subordinated notes 28,125 28,125
Total notes payable 921,705 753,174
Capital lease obligation 1,828 5,686
Accounts payable and accrued expenses 44,232 32,026
Other liabilities 64,384 48,593
Distributions payable 17,951 14,809
TOTAL LIABILITIES 1,050,100 854,288
Commitments and Contingencies
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, 2014 and December 31, 2013 $ 100,000 $ 100,000
Common shares of beneficial interest, $0.01 par, 120,000 shares authorized, 77,573 and 66,669 shares issued and outstanding as of December 31, 2014 and 2013, respectively 776 667
Additional paid-in capital 1,130,262 959,183
Accumulated distributions in excess of net income (356,715) (289,837)
Accumulated other comprehensive (loss) income (1,966) 84
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT 872,357 770,097
Noncontrolling interest 25,922 27,863
TOTAL SHAREHOLDERS' EQUITY 898,279 797,960
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,948,379 $ 1,652,248
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended December 31, Twelve Months Ended December 31,
2014 2013 2014 2013
REVENUE
Minimum rent $ 43,635 $ 34,891 $ 157,691 $ 124,169
Percentage rent 57 9 264 209
Recovery income from tenants 15,999 11,861 52,828 40,018
Other property income 2,935 762 5,521 3,337
Management and other fee income 531 493 2,059 2,335
TOTAL REVENUE 63,157 48,016 218,363 170,068
EXPENSES
Recoverable operating & real estate tax expense 18,524 13,007 58,793 43,355
Other non-recoverable operating expense 1,007 871 3,633 3,006
Depreciation and amortization 20,605 15,883 81,182 56,305
Acquisition costs 168 538 1,890 1,322
General and administrative expense 5,575 5,238 21,670 20,951
Provision for impairment 27,865 9,669 27,865 9,669
TOTAL EXPENSES 73,744 45,206 195,033 134,608
OPERATING (LOSS) INCOME (10,587) 2,810 23,330 35,460
OTHER INCOME AND EXPENSES
Other expense, net (74) (249) (689) (965)
Gain on sale of real estate 7,927 378 10,857 4,279
Earnings (loss) from unconsolidated joint ventures 411 268 75 (4,759)
Interest expense (9,866) (7,791) (33,742) (29,075)
Amortization of deferred financing fees (331) (378) (1,446) (1,447)
Deferred gain recognized on real estate 117 5,282
Loss on extinguishment of debt (340) (860) (340)
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE TAX (12,520) (5,302) (2,358) 8,435
Income tax provision (36) (63) (54) (64)
(LOSS) INCOME FROM CONTINUING OPERATIONS (12,556) (5,365) (2,412) 8,371
DISCONTINUED OPERATIONS
(Loss) gain on sale of real estate (74) 2,120
Income from discontinued operations 130 971
INCOME FROM DISCONTINUED OPERATIONS 56 3,091
NET (LOSS) INCOME (12,556) (5,309) (2,412) 11,462
Net loss (income) attributable to noncontrolling partner interest 351 169 48 (465)
NET (LOSS) INCOME ATTRIBUTABLE TO RPT (12,205) (5,140) (2,364) 10,997
Preferred share dividends (1,812) (1,812) (7,250) (7,250)
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS $ (14,017) $ (6,952) $ (9,614) $ 3,747
(LOSS) EARNINGS PER COMMON SHARE, BASIC
Continuing operations $ (0.18) $ (0.11) $ (0.14) $ 0.01
Discontinued operations 0.05
$ (0.18) $ (0.11) $ (0.14) $ 0.06
(LOSS) EARNINGS PER COMMON SHARE, DILUTED
Continuing operations $ (0.18) $ (0.11) $ (0.14) $ 0.01
Discontinued operations 0.05
$ (0.18) $ (0.11) $ (0.14) $ 0.06
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 77,573 64,412 72,118 59,336
Diluted 77,573 64,412 72,118 59,728
RAMCO-GERSHENSON PROPERTIES TRUST
FUNDS FROM OPERATIONS
(In thousands, except per share data)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2014 2013 2014 2013
Net (loss) income available to common shareholders $ (14,017) $ (6,952) $ (9,614) $ 3,747
Adjustments:
Rental property depreciation and amortization expense 20,574 15,802 80,826 56,316
Pro-rata share of real estate depreciation from unconsolidated joint ventures 596 722 4,719 3,689
(Gain) loss on sale of depreciable real estate (7,556) 74 (10,022) (2,120)
Loss on sale of joint venture depreciable real estate (1) 6,454
Provision for impairment on income-producing properties 4,580 9,342 4,580 9,342
Deferred gain recognized on real estate (117) (5,282)
Noncontrolling interest in Operating Partnership (2) (351) (169) (48) 465
Subtotal $ 3,826 $ 18,819 $ 70,324 $ 72,611
Add preferred share dividends (if converted) (3) 1,812 7,250
FFO $ 3,826 $ 20,631 $ 70,324 $ 79,861
Provision for impairment on land available for development or sale 23,285 327 23,285 327
Loss on extinguishment of debt 340 860 340
Gain on extinguishment of joint venture debt, net of RPT expenses (106)
Acquisition costs (4) 168 538 1,890 1,322
Add preferred share dividends (if converted) (3) 1,812 7,250
OPERATING FFO $ 29,091 $ 21,836 $ 103,503 $ 81,850
Weighted average common shares 77,564 64,412 72,118 59,336
Shares issuable upon conversion of Operating Partnership Units (2) 2,247 2,253 2,250 2,257
Dilutive effect of securities 222 392 217 392
Subtotal 80,033 67,057 74,585 61,985
Shares issuable upon conversion of preferred shares (3) 7,019 6,940 7,019 6,940
WEIGHTED AVERAGE EQUIVALENT SHARES OUTSTANDING, DILUTED 87,052 73,997 81,604 68,925
FFO, PER DILUTED SHARE $ 0.05 $ 0.28 $ 0.94 $ 1.16
OPERATING FFO, PER DILUTED SHARE $ 0.33 $ 0.30 $ 1.27 $ 1.19
Dividend per common share $ 0.20000 $ 0.18750 $ 0.77500 $ 0.71150
Payout ratio - Operating FFO 60.6% 62.5% 61.0% 59.8%
(1) Amount included in earnings (loss) from unconsolidated joint ventures.
(2) The total noncontrolling interest reflects OP units convertible 1:1 into common shares or the cash value thereof.
(3) Series D convertible preferred shares were dilutive for FFO for the year ended December 31, 2013 and anti-dilutive for the comparable period in 2014.
(4) Prior periods have been restated to reflect the add back of acquisition costs beginning in 1Q14.

Management considers funds from operations, also known as "FFO", to be an appropriate supplemental measure of the financial performance of an equity REIT. Under the NAREIT definition, FFO represents net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of depreciable property and excluding impairment provisions on depreciable real estate or on investments in non-consolidated investees that are driven by measurable decreases in the fair value of depreciable real estate held by the investee, plus depreciation and amortization, (excluding amortization of financing costs). Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis.

Also, we consider "Operating FFO" a meaningful, additional measure of financial performance because it excludes acquisition costs and periodic items such as impairment provisions on land available for sale, bargain purchase gains, and gains or losses on extinguishment of debt that are not adjusted under the current NAREIT definition of FFO. We provide a reconciliation of FFO to Operating FFO. FFO and Operating FFO should not be considered alternatives to GAAP net income available to common shareholders or as alternatives to cash flow as measures of liquidity.

While we consider FFO and Operating FFO useful measures for reviewing our comparative operating and financial performance between periods or to compare our performance to different REITs, our computations of FFO and Operating FFO may differ from the computations utilized by other real estate companies, and therefore, may not be comparable.

CONTACT: Dawn L. Hendershot, Vice President of Investor Relations and Corporate Communications 31500 Northwestern Highway, Suite 300 Farmington Hills, MI 48334 dhendershot@rgpt.com (248) 592-6202Source:Ramco-Gershenson Properties Trust