BLOOMFIELD HILLS, Mich.,
April 25, 2016 /PRNewswire/
-- Agree Realty Corporation (NYSE: ADC) (the "Company") today
announced results for the quarter ended March 31, 2016. All per share amounts included
herein are on a diluted per common share basis unless otherwise
stated.
First Quarter 2016 Financial and Operating
Highlights:
- Increased Funds from Operations ("FFO") per share 8.5% to
$0.61
- Increased FFO 27.2% to $12.7
million
- Increased Adjusted Funds from Operations ("AFFO") per share
7.9% to $0.61
- Increased AFFO 26.5% to $12.7
million
- Increased rental revenue 28.2% to $18.7
million
- Invested in 13 retail net lease properties for $38.3 million
- Announced one new development project
- Declared dividends of $0.465 per
share, an increase of 3.3% over dividends per share declared in the
first quarter of 2015
Financial Results
Total Rental Revenue
Total rental revenue, which includes minimum rents and
percentage rents, for the three months ended March 31, 2016 increased 28.2% to $18.7 million compared with total rental revenue
of $14.6 million for the comparable
period in 2015.
Funds from Operations
FFO for the three months ended March 31,
2016 increased 27.2% to $12.7
million compared with FFO of $10.0
million for the comparable period in 2015. FFO per
share for the three months ended March 31,
2016 increased 8.5% to $0.61
compared with FFO per share of $0.56
for the comparable period in 2015.
Adjusted Funds from Operations
AFFO for the three months ended March 31,
2016 increased 26.5% to $12.7
million compared with AFFO of $10.1
million for the comparable period in 2015. AFFO per
share for the three months ended March 31,
2016 increased 7.9% to $0.61
compared with AFFO per share of $0.57
for the comparable period in 2015.
Net Income
Net income attributable to the Company for the three months
ended March 31, 2016 was $7.5 million, or $0.36 per share, compared with $6.4 million, or $0.37 per share, for the comparable period in
2015.
Dividend
The Company paid a cash dividend of $0.465 per share on April
15, 2016 to stockholders of record on March 31, 2016, a 3.3% increase over the
$0.45 quarterly dividend declared in
the first quarter of 2015. The quarterly dividend represents
payout ratios of approximately 76.5% of FFO and 76.1% of AFFO,
respectively.
CEO Comments
"We had another strong quarter as we continue to execute our
operating strategy," said Joey Agree, President and Chief Executive
Officer of Agree Realty Corporation. "During the quarter we
invested in thirteen high-quality net lease properties with strong
underlying real estate fundamentals located in a number of
attractive markets. We have a robust pipeline of high-quality
opportunities through our three distinct retail net lease
investment platforms, which we are confident will produce superior
risk-adjusted returns for our shareholders. With a strong balance
sheet situated for continued growth, an industry-leading portfolio
of retail net lease properties, and no lease expirations or debt
maturities remaining in 2016, we are extremely well-positioned for
the future."
Portfolio Update
As of March 31, 2016, the
Company's portfolio consisted of 291 properties located in 42
states and totaling 5.4 million square feet of gross leasable
space. Properties ground leased to tenants accounted for 8.4%
of annualized base rent.
The portfolio was approximately 99.5% leased, had a
weighted-average remaining lease term of approximately 11.2 years,
and generated approximately 50.3% of annualized base rents from
investment grade tenants.
The table below provides a summary of the Company's portfolio as
of March 31, 2016:
|
Property
Type
|
Number
of
Properties
|
|
Annualized
Base Rent (1)
|
|
Percent
of
Annualized
Base Rent
|
|
Percent
Investment
Grade (2)
|
|
Weighted
Average
Lease Term
|
|
|
|
|
|
|
|
|
|
|
|
Retail Net
Lease
|
262
|
|
$66,726
|
|
89.3%
|
|
47.3%
|
|
11.1 yrs
|
|
Retail Net Lease Ground
Leases
|
26
|
|
6,287
|
|
8.4%
|
|
88.2%
|
|
13.5 yrs
|
|
Total Retail Net
Lease
|
288
|
|
73,013
|
|
97.7%
|
|
50.9%
|
|
11.3
yrs
|
|
Total
Portfolio
|
291
|
|
$74,766
|
|
100.0%
|
|
50.3%
|
|
11.2
yrs
|
|
|
Annualized
base rent is in thousands; any differences are a result of
rounding.
|
|
(1)
Represents annualized straight-line rent as of March 31,
2016.
|
|
(2) Reflects tenants, or parent
entities thereof, with investment grade credit ratings from
Standard & Poor's,
Moody's, Fitch and/or
NAIC.
|
Acquisitions
Total acquisition volume for the first quarter of 2016 was
approximately $33.3 million and
included 12 assets net leased to a number of notable retailers
operating in the entertainment retail, specialty retail, quick
service restaurant, discount and auto service sectors. The
properties are located in 9 states and leased to 13 distinct
tenants operating across 9 retail sectors. These properties
were acquired at a weighted-average cap rate of 7.9% and with a
weighted-average remaining lease term of approximately 6.9
years.
Development and Partner Capital Solutions
In the first quarter of 2016, the Company, through its
development program, completed the previously announced Hobby Lobby
project in Springfield, Ohio. The
development was completed ahead of schedule at a total cost of
approximately $5.0 million and is
subject to a new 15-year lease.
In addition to the Company's recently completed development,
construction commenced on its previously announced Burger King in
Farr West, Utah. This project
is part of the previously announced partnership with Meridian
Restaurants and has a total cost of approximately $1.6 million. Rent is expected to commence
in the third quarter of 2016 and the Company will own a 100% fee
simple interest in the property upon the project's completion.
Subsequent to the end of the first quarter of 2016, the Company
commenced the development of a new Burger King in Devils Lake,
North Dakota. This property is also part of the previously
announced partnership with Meridian Restaurants and is subject to a
new 20-year lease.
Leasing
During the first quarter of 2016 the Company executed new
leases, extensions or options on over 31,000 square feet of gross
leasable area throughout the portfolio. Material new leases,
extensions or options included a 24,153 square foot Staples in
Davenport, Iowa. The Company has no remaining lease
maturities in 2016.
Top Tenants
The following table presents annualized base rents for all
tenants that generated 1.5% or greater of the Company's total
annualized base rent as of March 31,
2016:
|
Tenant
|
|
Annualized
Base Rent (1)
|
|
Percent of
Annualized
Base Rent
|
|
|
|
|
|
|
Walgreens
|
|
$12,310
|
|
16.5%
|
|
Wal-Mart
|
|
3,924
|
|
5.2%
|
|
Wawa
|
|
2,465
|
|
3.3%
|
|
CVS
|
|
2,463
|
|
3.3%
|
|
Academy
Sports
|
|
1,982
|
|
2.7%
|
|
Rite Aid
|
|
1,886
|
|
2.5%
|
|
Lowe's
|
|
1,846
|
|
2.5%
|
|
Dollar
General
|
|
1,795
|
|
2.4%
|
|
24 Hour
Fitness
|
|
1,759
|
|
2.4%
|
|
BJ's
Wholesale
|
|
1,709
|
|
2.3%
|
|
LA Fitness
|
|
1,694
|
|
2.3%
|
|
Taco
Bell(2)
|
|
1,537
|
|
2.1%
|
|
Dollar Tree
|
|
1,427
|
|
1.9%
|
|
Burger
King(3)
|
|
1,241
|
|
1.7%
|
|
Kohl's
|
|
1,180
|
|
1.6%
|
|
AutoZone
|
|
1,163
|
|
1.6%
|
|
Dick's Sporting
Goods
|
|
1,089
|
|
1.5%
|
|
Total Top
Tenants
|
|
$41,470
|
|
55.8%
|
|
|
Annualized
base rent is in thousands; any differences are a result of
rounding.
|
|
(1)
Represents annualized straight-line rent as of March 31,
2016.
|
|
(2)
Franchise restaurants operated by Charter Foods North,
LLC.
|
|
(3)
Franchise restaurants operated by Meridian Restaurants Unlimited,
LC.
|
Tenant Sectors
The following table presents annualized base rents for the
Company's top retail sectors that generated 2.5% or greater of the
Company's total annualized base rent as of March 31, 2016:
|
Sector
|
|
Annualized
Base Rent (1)
|
|
Percent of
Annualized
Base Rent
|
|
|
|
|
|
|
Pharmacy
|
|
$16,659
|
|
22.3%
|
|
Restaurants - Quick
Service
|
|
5,702
|
|
7.6%
|
|
Specialty
Retail
|
|
4,037
|
|
5.4%
|
|
General
Merchandise
|
|
3,956
|
|
5.3%
|
|
Apparel
|
|
3,906
|
|
5.2%
|
|
Grocery
Stores
|
|
3,843
|
|
5.1%
|
|
Warehouse
Clubs
|
|
3,749
|
|
5.0%
|
|
Health &
Fitness
|
|
3,562
|
|
4.8%
|
|
Sporting
Goods
|
|
3,149
|
|
4.2%
|
|
Convenience
Stores
|
|
2,599
|
|
3.5%
|
|
Restaurants - Casual
Dining
|
|
2,388
|
|
3.2%
|
|
Dollar
Stores
|
|
2,280
|
|
3.0%
|
|
Auto Parts
|
|
2,257
|
|
3.0%
|
|
Crafts and
Novelties
|
|
1,977
|
|
2.6%
|
|
Home
Improvement
|
|
1,846
|
|
2.5%
|
|
Other(2)
|
|
12,856
|
|
17.3%
|
|
Total
Portfolio
|
|
$74,766
|
|
100.0%
|
|
|
Annualized base rent is in thousands; any differences are a result
of rounding.
|
|
(1)
Represents annualized straight-line rent as of March 31,
2016.
|
|
(2) Includes sectors generating
less than 2.5% of annualized base rent.
|
Lease Expiration
The following table presents contractual lease expirations
within the Company's portfolio as of March
31, 2016, assuming that no tenants exercise renewal
options:
|
Year
|
Leases
|
|
Annualized
Base Rent
(1)
|
|
Percent
of
Annualized
Base
Rent
|
|
Gross
Leasable
Area
|
|
Percent of
Gross
Leasable
Area
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
0
|
|
$0
|
|
0.0%
|
|
0
|
|
0.0%
|
|
2017
|
10
|
|
1,700
|
|
2.3%
|
|
114
|
|
2.1%
|
|
2018
|
11
|
|
1,431
|
|
1.9%
|
|
245
|
|
4.5%
|
|
2019
|
12
|
|
4,326
|
|
5.8%
|
|
372
|
|
6.8%
|
|
2020
|
16
|
|
2,451
|
|
3.3%
|
|
232
|
|
4.3%
|
|
2021
|
22
|
|
4,812
|
|
6.4%
|
|
293
|
|
5.4%
|
|
2022
|
14
|
|
2,760
|
|
3.7%
|
|
266
|
|
4.9%
|
|
2023
|
24
|
|
3,808
|
|
5.1%
|
|
313
|
|
5.8%
|
|
2024
|
29
|
|
6,504
|
|
8.7%
|
|
544
|
|
10.0%
|
|
2025
|
30
|
|
5,886
|
|
7.9%
|
|
428
|
|
7.9%
|
|
Thereafter
|
164
|
|
41,088
|
|
54.9%
|
|
2,636
|
|
48.3%
|
|
Total
Portfolio
|
332
|
|
$74,766
|
|
100.0%
|
|
5,443
|
|
100.0%
|
|
|
Annualized
base rent and gross leasable area are in thousands; any differences
are a result of rounding.
|
|
(1)
Represents annualized straight-line rent as of March 31,
2016.
|
Capital Markets and Balance Sheet
Capital Markets
On March 11, 2016, the Company
paid off an $8.6 million mortgage
secured by three Wawa properties. The Company has no
remaining debt maturities in 2016.
During the three months ended March 31,
2016, the Company issued 53,886 shares of common stock under
its at-the-market equity program ("ATM program"), realizing gross
proceeds of approximately $2.1
million.
Balance Sheet
As of March 31, 2016, the
Company's total debt to total enterprise value was approximately
30.3%. Total enterprise value is calculated as the sum of
total debt and the market value of the Company's outstanding shares
of common stock, assuming conversion of operating partnership units
into common stock.
For the three months ended March 31,
2016, the Company had 20.5 million fully diluted
weighted-average shares outstanding. The Company had 20.4 million
basic weighted-average shares outstanding for the three months
ended March 31, 2016.
The Company's assets are held by, and its operations are
conducted through, Agree Limited Partnership, of which the Company
is the sole general partner. As of March 31, 2016, there were 347,619 operating
partnership units outstanding and the Company held a 98.3% interest
in the operating partnership.
2016 Outlook
The Company's outlook for acquisition volume in 2016, which
assumes continued growth in economic activity, positive business
trends and other significant assumptions, remains between
$175 and $200 million of high-quality
retail net lease properties.
Conference Call/Webcast
Agree Realty Corporation will host its quarterly analyst and
investor conference call on Tuesday, April
26, 2016 at 9:00 AM EDT.
To participate in the conference call, please dial (866) 363-3979
approximately ten minutes before the call begins.
Additionally, a webcast of the conference call will be available
through the Company's website. To access the webcast, visit
www.agreerealty.com ten minutes prior to the start time of the
conference call and go to the Invest section of the website.
A replay of the conference call webcast will be archived and
available online through the Invest section of
www.agreerealty.com.
About Agree Realty Corporation
Agree Realty Corporation is primarily engaged in the acquisition
and development of properties net leased to industry-leading retail
tenants. The Company currently owns and operates a portfolio
of 297 properties, located in 42 states and containing
approximately 5.5 million square feet of gross leasable
space. The common stock of Agree Realty Corporation is listed
on the New York Stock Exchange under the symbol "ADC". For
additional information, visit the Company's home page at
www.agreerealty.com.
Forward-Looking Statements
This press release may contain certain "forward-looking
statements" made pursuant to the safe harbor provisions of the
Private Securities Reform Act of 1995. Forward-looking statements
are generally identifiable by use of forward-looking terminology
such as "may," "will," "should," "potential," "intend," "expect,"
"seek," "anticipate," "estimate," "approximately," "believe,"
"could," "project," "predict," "forecast," "continue," "assume,"
"plan," references to "outlook" or other similar words or
expressions. Forward-looking statements are based on certain
assumptions and can include future expectations, future plans and
strategies, financial and operating projections and forecasts and
other forward-looking information and estimates. These
forward-looking statements are subject to various risks and
uncertainties, many of which are beyond the Company's control,
which could cause actual results to differ materially from such
statements. These risks and uncertainties are described in greater
detail in the Company's filings with the Securities and Exchange
Commission, including, without limitation, the Company's Annual
Report on Form 10-K for the year ended December 31, 2015 and in subsequent quarterly
reports. Except as required by law, the Company disclaims any
obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise.
For further information about the Company's business and
financial results, please refer to the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
"Risk Factors" sections of the Company's SEC filings, including,
but not limited to, its Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q, copies of which may be obtained at the Invest
section of the Company's website at
www.agreerealty.com.
All information in this press release is as of April 25, 2016. The Company undertakes no duty to
update the statements in this press release to conform the
statements to actual results or changes in the Company's
expectations.
|
|
|
|
|
|
|
|
|
Agree Realty
Corporation
|
|
Consolidated
Balance Sheet
|
|
($ in thousands,
except per share data)
|
|
|
March 31,
2016
|
|
December 31,
2015
|
|
Assets:
|
(Unaudited)
|
|
|
|
Real Estate
Investments:
|
|
|
|
|
Land
|
$
236,700
|
|
$
225,274
|
|
Buildings
|
553,441
|
|
526,912
|
|
Accumulated
depreciation
|
(59,764)
|
|
(56,401)
|
|
Property under
development
|
3,575
|
|
3,663
|
|
Net real estate
investments
|
733,952
|
|
699,448
|
|
Cash and cash
equivalents
|
3,711
|
|
2,712
|
|
Accounts receivable -
Tenants, net of allowance of $35 for possible losses
at March 31, 2016 and December 31, 2015, respectively
|
7,807
|
|
7,418
|
|
Unamortized
Deferred Expenses:
|
|
|
|
|
Credit facility
financing Costs, net of accumulated amortization of $1,584
and $1,532 at March 31, 2016 and December 31, 2015,
respectively
|
490
|
|
506
|
|
Leasing costs, net of
accumulated amortization of $575 and $554 at March
31, 2016 and December 31, 2015, respectively
|
682
|
|
664
|
|
Lease intangibles,
net of accumulated amortization of $12,263 and $10,578
at March 31, 2016 and December 31, 2015, respectively
|
76,651
|
|
76,552
|
|
Other
assets
|
2,260
|
|
2,570
|
|
Total
Assets
|
$
825,553
|
|
$
789,870
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
Mortgage notes
payable, net
|
$
91,125
|
|
$
100,359
|
|
Unsecured Term Loans,
net
|
99,421
|
|
99,156
|
|
Senior Unsecured
Notes, net
|
99,177
|
|
99,389
|
|
Unsecured Revolving
Credit Facility
|
60,000
|
|
18,000
|
|
Dividends and
Distributions Payable
|
9,812
|
|
9,758
|
|
Deferred
Revenue
|
425
|
|
541
|
|
Accrued Interest
Payable
|
1,977
|
|
963
|
|
Accounts Payable and
Accrued Expense:
|
|
|
|
|
Capital
Expenditures
|
28
|
|
122
|
|
Operating
|
6,252
|
|
3,927
|
|
Interest Rate
Swaps
|
6,138
|
|
3,301
|
|
Deferred Income
Taxes
|
705
|
|
705
|
|
Tenant
Deposits
|
39
|
|
29
|
|
Total
Liabilities
|
375,099
|
|
336,250
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Common stock, $.0001
par value, 28,000,000 shares authorized,
20,754,264 and 20,637,301 shares issued and outstanding,
respectively
|
2
|
|
2
|
|
Preferred stock,
$.0001 par value per share, 4,000,000 shares authorized
|
|
|
|
|
Series A junior
participating preferred stock, $.0001 par value, 200,000
authorized, no shares issued and outstanding
|
-
|
|
-
|
|
Additional paid-in
capital
|
484,511
|
|
482,514
|
|
Dividends in excess
of net income
|
(30,452)
|
|
(28,262)
|
|
Accumulated other
comprehensive loss
|
(6,018)
|
|
(3,130)
|
|
Total Stockholders'
Equity - Agree Realty Corporation
|
448,043
|
|
451,124
|
|
Non-controlling
interest
|
2,411
|
|
2,496
|
|
Total
Stockholders' Equity
|
450,454
|
|
453,620
|
|
Total Liabilities
and Stockholders' Equity
|
$
825,553
|
|
$
789,870
|
|
|
|
|
|
Agree Realty
Corporation
|
|
Consolidated
Statements of Operations and Comprehensive Income
|
|
($ in thousands,
except per share data)
|
|
|
|
|
|
Three months
ended
March 31,
|
|
2016
|
|
2015
|
|
(Unaudited)
|
|
Revenues
|
|
|
|
|
Minimum
rents
|
$
18,491
|
|
$
14,554
|
|
Percentage
rents
|
183
|
|
10
|
|
Operating cost
reimbursement
|
1,589
|
|
1,178
|
|
Other
income
|
(39)
|
|
1
|
|
Total
Revenues
|
20,224
|
|
15,743
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
Real estate
taxes
|
1,123
|
|
763
|
|
Property operating
expenses
|
573
|
|
571
|
|
Land lease
payments
|
163
|
|
132
|
|
General and
administrative
|
2,045
|
|
1,668
|
|
Depreciation and
amortization
|
5,085
|
|
3,553
|
|
Total Operating
Expenses
|
8,989
|
|
6,687
|
|
|
|
|
|
Income from
Operations
|
11,235
|
|
9,056
|
|
|
|
|
|
Other (Expense)
Income
|
|
|
|
|
Interest expense,
net
|
(3,649)
|
|
(2,461)
|
|
Gain (loss) on sale
of assets
|
-
|
|
79
|
|
Loss on debt
extinguishment
|
-
|
|
(180)
|
|
|
|
|
|
Net
Income
|
7,586
|
|
6,494
|
|
|
|
|
|
Less Net Income
Attributable to Non-Controlling Interest
|
125
|
|
126
|
|
|
|
|
|
Net Income
Attributable to Agree Realty Corporation
|
$
7,461
|
|
$
6,368
|
|
|
|
|
|
Net Income Per Share
Attributable to Agree Realty Corporation
|
|
|
|
|
Basic
|
$
0.37
|
|
$
0.37
|
|
Diluted
|
$
0.36
|
|
$
0.37
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income
|
|
|
|
|
Net income
|
$
7,586
|
|
$
6,494
|
|
Other Comprehensive
Income (Loss)
|
(2,935)
|
|
(2,012)
|
|
Total Comprehensive
Income
|
4,651
|
|
4,482
|
|
Comprehensive Income
Attributable to Non-Controlling Interest
|
(77)
|
|
(87)
|
|
Comprehensive
Income Attributable to Agree Realty Corporation
|
$
4,574
|
|
$
4,395
|
|
|
|
|
|
Weighted Average
Number of Common Shares Outstanding - Basic
|
20,439
|
|
17,370
|
|
Weighted Average
Number of Common Shares Outstanding - Diluted
|
20,480
|
|
17,416
|
|
|
|
|
|
Agree Realty
Corporation
|
|
Reconciliation of
Net Income to FFO and Adjusted FFO
|
|
($ in thousands,
except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
Three months
ended
March 31,
|
|
2016
|
|
2015
|
|
|
|
|
|
Net income
|
$ 7,586
|
|
$ 6,494
|
|
Depreciation of real
estate assets
|
3,362
|
|
2,555
|
|
Amortization of
leasing costs
|
22
|
|
30
|
|
Amortization of lease
intangibles
|
1,686
|
|
953
|
|
(Gain) loss on sale
of assets
|
-
|
|
(79)
|
|
Funds from
Operations
|
$
12,656
|
|
$
9,953
|
|
Straight-line accrued
rent
|
(649)
|
|
(598)
|
|
Deferred revenue
recognition
|
(116)
|
|
(116)
|
|
Stock based
compensation expense
|
708
|
|
524
|
|
Amortization of
financing costs
|
118
|
|
109
|
|
Non-real estate
depreciation
|
15
|
|
16
|
|
Debt extinguishment
costs
|
-
|
|
180
|
|
Adjusted Funds
from Operations
|
$
12,732
|
|
$
10,068
|
|
|
|
|
|
FFO per common
share - Basic
|
$
0.61
|
|
$
0.56
|
|
FFO per common
share - Diluted
|
$
0.61
|
|
$
0.56
|
|
|
|
|
|
Adjusted FFO per
common share - Basic
|
$
0.61
|
|
$
0.57
|
|
Adjusted FFO per
common share - Diluted
|
$
0.61
|
|
$
0.57
|
|
|
|
|
|
Weighted Average
Number of Common Shares and Units Outstanding - Basic
|
20,786
|
|
17,717
|
|
Weighted Average
Number of Common Shares and Units Outstanding - Diluted
|
20,828
|
|
17,764
|
|
|
|
|
|
|
|
|
|
Supplemental
Information:
|
|
|
|
|
Scheduled principal
repayments
|
$
720
|
|
$
677
|
|
Capitalized
interest
|
7
|
|
1
|
|
Capitalized building
improvements
|
-
|
|
-
|
|
|
|
|
Non-GAAP Financial Measures
FFO
The Company considers the non-GAAP measures of FFO and FFO per
share/unit to be key supplemental measures of the Company's
performance and should be considered along with, but not as
alternatives to, net income or loss as a measure of the Company's
operating performance. Historical cost accounting for real estate
assets implicitly assumes that the value of real estate assets
diminishes predictably over time. Since real estate values instead
have historically risen or fallen with market conditions, most real
estate industry investors consider FFO to be helpful in evaluating
a real estate company's operations.
The White Paper on FFO approved by NAREIT in April 2002, as revised in 2011, defines FFO as
net income or loss (computed in accordance with GAAP), excluding
gains (or losses) from sales of properties and items classified by
GAAP as extraordinary, plus real estate-related depreciation and
amortization and impairment writedowns, and after comparable
adjustments for the Company's portion of these items related to
unconsolidated entities and joint ventures. The Company computes
FFO consistent with standards established by NAREIT, which may not
be comparable to FFO reported by other REITs that do not define the
term in accordance with the current NAREIT definition or that
interpret the current NAREIT definition differently than the
Company.
The Company believes that excluding the effect of extraordinary
items, real estate-related depreciation and amortization and
impairments, which are based on historical cost accounting and
which may be of limited significance in evaluating current
performance, can facilitate comparisons of operating performance
between periods and between REITs, even though FFO does not
represent an amount that accrues directly to common shareholders.
However, FFO may not be helpful when comparing the Company to
non-REITs.
FFO does not represent cash generated from operating activities
as determined by GAAP and should not be considered an alternative
to net income or loss, cash flows from operations or any other
operating performance measure prescribed by GAAP. FFO is not a
measurement of the Company's liquidity, nor is FFO indicative of
funds available to fund the Company's cash needs, including its
ability to make cash distributions. This measurement does not
reflect cash expenditures for long-term assets and other items that
have been and will be incurred. FFO may include funds that may not
be available for management's discretionary use due to functional
requirements to conserve funds for capital expenditures, property
acquisitions, and other commitments and uncertainties. To
compensate for this, management considers the impact of these
excluded items to the extent they are material to operating
decisions or the evaluation of the Company's operating
performance.
Adjusted FFO
The Company presents adjusted FFO (including adjusted FFO per
share/unit), which adjusts for certain additional items including
straight-line accrued rent, deferred revenue recognition, stock
based compensation expense, non-real estate depreciation and debt
extinguishment costs and certain other items. The Company excludes
these items as it believes it allows for meaningful comparisons
with other REITs and between periods and is more indicative of the
ongoing performance of its assets. As with FFO, the Company's
calculation of adjusted FFO may be different from similar adjusted
measures calculated by other REITs.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/agree-realty-corporation-reports-first-quarter-2016-results-300256948.html
SOURCE Agree Realty Corporation