BLOOMFIELD HILLS, Mich.,
July 24, 2017 /PRNewswire/ -- Agree
Realty Corporation (NYSE: ADC) (the "Company") today announced
results for the quarter ended June 30,
2017. All per share amounts included herein are on a
diluted per common share basis unless otherwise stated.
Second Quarter 2017 Financial and Operating
Highlights:
- Invested $139.2 million in 37
retail net lease properties
- Commenced three development and Partner Capital Solutions
("PCS") projects
- Raised approximately $108.0
million in net proceeds from the issuance of 2.4 million
common shares
- Increased rental revenue 26.3% to $25.2
million
- Net Income per share attributable to the Company increased
17.4% to $0.56
- Net Income attributable to the Company increased 39.5% to
$14.9 million
- Increased Funds from Operations ("FFO") per share 10.2% to
$0.67
- Increased FFO 30.6% to $18.0
million
- Increased Adjusted Funds from Operations ("AFFO") per share
9.7% to $0.67
- Increased AFFO 30.1% to $17.9
million
- Declared a quarterly dividend of $0.505 per share, an increase of 5.2% over the
dividend per share declared in the second quarter of 2016
Financial Results
Total Rental Revenue
Total rental revenue, which includes minimum rents and
percentage rents, for the three months ended June 30, 2017 increased 26.3% to $25.2 million, compared to total rental revenue
of $19.9 million for the comparable
period in 2016.
Total rental revenue for the six months ended June 30, 2017 increased 28.0% to $49.4 million, compared to total rental revenue
of $38.6 million for the comparable
period in 2016.
Net Income
Net Income attributable to the Company for the three months
ended June 30, 2017 increased 39.5%
to $14.9 million, compared to
$10.7 million for the comparable
period in 2016. Net Income per share attributable to the
Company for the three months ended June 30,
2017 increased 17.4% to $0.56,
compared to $0.48 per share for the
comparable period in 2016.
Net income attributable to the Company for the six months ended
June 30, 2017 increased 62.5% to
$29.5 million, compared to
$18.1 million for the comparable
period in 2016. Net income per share attributable to the
Company for the six months ended June 30,
2017 increased 32.4% to $1.12,
compared to $0.85 per share for the
comparable period in 2016.
Funds from Operations
FFO for the three months ended June 30,
2017 increased 30.6% to $18.0
million, compared to FFO of $13.8
million for the comparable period in 2016. FFO per
share for the three months ended June 30,
2017 increased 10.2% to $0.67,
compared to FFO per share of $0.61
for the comparable period in 2016.
FFO for the six months ended June 30,
2017 increased 32.5% to $35.0
million, compared to FFO of $26.4
million for the comparable period in 2016. FFO per
share for the six months ended June 30,
2017 increased 8.3% to $1.32,
compared to FFO per share of $1.22
for the comparable period in 2016.
Adjusted Funds from Operations
AFFO for the three months ended June 30,
2017 increased 30.1% to $17.9
million, compared to AFFO of $13.7
million for the comparable period in 2016. AFFO per
share for the three months ended June 30,
2017 increased 9.7% to $0.67,
compared to AFFO per share of $0.61
for the comparable period in 2016.
AFFO for the six months ended June 30,
2017 increased 32.0% to $34.9
million, compared to AFFO of $26.5
million for the comparable period in 2016. AFFO per
share for the six months ended June 30,
2017 increased 7.9% to $1.31,
compared to AFFO per share of $1.22
for the comparable period in 2016.
Dividend
The Company paid a cash dividend of $0.505 per share on July
14, 2017 to stockholders of record on June 30, 2017, a 5.2% increase over the
$0.48 quarterly dividend declared in
the second quarter of 2016. The quarterly dividend represents
payout ratios of approximately 75.3% of FFO per share and 75.8% of
AFFO per share, respectively.
CEO Comments
"We are very pleased with our performance during the quarter as
we continue to deliver strong results across all aspects of our
business," said Joey Agree, President and Chief Executive Officer
of Agree Realty Corporation. "During the quarter, we invested in 37
high-quality net lease properties across our three external growth
platforms, while also maintaining capacity and flexibility with our
leading balance sheet. We remain intently focused on
industry-leading retailers that employ a cohesive omni-channel
strategy or offer a compelling 21st century customer
experience."
Portfolio
Update
As of June 30, 2017, the Company's
portfolio consisted of 413 properties located in 43 states and
totaled 7.9 million square feet of gross leasable space.
Properties ground leased to tenants accounted for 6.9% of
annualized base rents.
The portfolio was approximately 99.6% leased, had a weighted
average remaining lease term of approximately 10.6 years, and
generated approximately 43.9% of annualized base rents from
investment grade retail tenants.
The following table provides a summary of the Company's
portfolio as of June 30, 2017:
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
|
374
|
|
$98,895
|
|
91.5%
|
|
41.0%
|
|
10.6 yrs
|
Retail Net Lease Ground
Leases
|
36
|
|
7,502
|
|
6.9%
|
|
86.2%
|
|
12.5 yrs
|
Total Retail Net
Lease
|
410
|
|
$106,397
|
|
98.4%
|
|
44.2%
|
|
10.7
yrs
|
Total
Portfolio
|
413
|
|
$108,137
|
|
100.0%
|
|
43.9%
|
|
10.6
yrs
|
|
Annualized base
rent is in thousands; any differences are the result of
rounding.
|
(1)
|
Represents
annualized straight-line rent as of June 30, 2017.
|
(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 second quarter of 2017 was
approximately $131.0 million and
included 36 assets net leased to notable retailers operating in the
discount apparel, convenience stores, auto parts, auto service,
health and fitness and home improvement sectors. The
properties are located in 19 states and leased to tenants operating
in 18 retail sectors. The properties were acquired at a
weighted-average capitalization rate of 7.7% and with a weighted
average remaining lease term of approximately 12.7 years.
For the six months ending June 30,
2017, total acquisition volume was approximately
$183.9 million and included 47
high-quality retail net lease assets. The properties are
located in 21 states and leased to 38 diverse tenants who operate
in 20 retail sectors. The properties were acquired at a
weighted-average capitalization rate of 7.7% and with a
weighted-average remaining lease term of approximately 12.1
years.
Dispositions
During the quarter, the Company sold two properties for gross
proceeds of approximately $12.1
million. The dispositions were completed at a
weighted-average capitalization rate of 6.0%.
For the six months ended June 30,
2017, the Company has divested of three properties for total
gross proceeds of $22.6 million. The
weighted-average capitalization rate of the dispositions was
5.9%.
Development and Partner Capital Solutions
In the second quarter of 2017, the Company completed its
previously announced Camping World in Georgetown, Kentucky. The project was the
Company's first ground-up development for Camping World, and is
subject to a new 20-year net lease. Total project costs were
approximately $8.2 million.
Also within the quarter, the Company completed landlord's work
in Boynton Beach, Florida. The
property has been redeveloped and expanded for Orchard Supply
Hardware (Lowe's Companies, Inc.). The project is subject to a new
15-year net lease. Rent is anticipated to commence in the third
quarter of 2017, upon completion of the tenant's work.
During the second quarter, the Company commenced three new
development and PCS projects with total costs of approximately
$24.1 million. The projects include
the Company's first PCS project with Art Van Furniture in
Canton, Michigan, as well as the
Company's first two development projects with Mister Car Wash in
Urbandale, Iowa and Bernalillo, New Mexico.
In the first six months of 2017, the Company had seven
development or PCS projects completed or under construction on
behalf of a number of industry-leading retail tenants. Anticipated
total costs are approximately $45.9
million and include the following completed or commenced
projects:
Tenant
|
|
Location
|
|
Lease
Structure
|
|
Lease
Term
|
|
Actual or
Anticipated Rent
Commencement
|
|
Status
|
|
|
|
|
|
|
|
|
|
|
|
Camping
World
|
|
Tyler, TX
|
|
Build-to-Suit
|
|
20 Years
|
|
Q1 2017
|
|
Completed
|
Burger
King(1)
|
|
Heber, UT
|
|
Build-to-Suit
|
|
20 Years
|
|
Q1 2017
|
|
Completed
|
Camping
World
|
|
Georgetown,
KY
|
|
Build-to-Suit
|
|
20 Years
|
|
Q2 2017
|
|
Completed
|
Orchard
Supply
|
|
Boynton Beach,
FL
|
|
Build-to-Suit
|
|
15 Years
|
|
Q3 2017
|
|
Under
Construction
|
Mister Car
Wash
|
|
Urbandale,
IA
|
|
Build-to-Suit
|
|
20 years
|
|
Q4 2017
|
|
Under
Construction
|
Mister Car
Wash
|
|
Bernalillo,
NM
|
|
Build-to-Suit
|
|
20 years
|
|
Q4 2017
|
|
Under
Construction
|
Art Van
Furniture
|
|
Canton, MI
|
|
Build-to-Suit
|
|
20 years
|
|
Q1 2018
|
|
Under
Construction
|
(1)
|
Franchise restaurant
operated by Meridian Restaurants Unlimited, LC.
|
Leasing
During the second quarter, the Company executed new leases,
extensions or options on approximately 86,000 square feet of gross
leasable area throughout the existing portfolio. Notable new
leases, extensions or options included a 33,608-square foot Big
Lots in Cedar Park, Texas. The
Company has one remaining lease maturity in 2017 representing 0.3%
of annualized base rent.
Top Tenants
The following table presents annualized base rents for all
tenants that represent 1.5% or greater of the Company's total
annualized base rent as of June 30,
2017:
Tenant
|
|
Annualized
Base Rent(1)
|
|
Percent of
Annualized
Base Rent
|
|
|
|
|
|
Walgreens
|
|
$9,568
|
|
8.8%
|
Walmart
|
|
4,224
|
|
3.9%
|
LA Fitness
|
|
3,713
|
|
3.4%
|
Lowe's
|
|
3,103
|
|
2.9%
|
CVS
|
|
2,738
|
|
2.5%
|
Wawa
|
|
2,664
|
|
2.5%
|
Mister Car
Wash
|
|
2,580
|
|
2.4%
|
Smart &
Final
|
|
2,475
|
|
2.3%
|
Dollar
General
|
|
2,415
|
|
2.2%
|
Tractor
Supply
|
|
2,179
|
|
2.0%
|
Hobby Lobby
|
|
2,176
|
|
2.0%
|
Dave &
Buster's
|
|
2,058
|
|
1.9%
|
Academy
Sports
|
|
1,982
|
|
1.8%
|
Dollar Tree
|
|
1,939
|
|
1.8%
|
Burger
King(2)
|
|
1,916
|
|
1.8%
|
Rite Aid
|
|
1,886
|
|
1.7%
|
24 Hour
Fitness
|
|
1,759
|
|
1.6%
|
BJ's
Wholesale
|
|
1,709
|
|
1.6%
|
Other(3)
|
|
57,053
|
|
52.9%
|
Total
Portfolio
|
|
$108,137
|
|
100.0%
|
|
Annualized base
rent is in thousands; any differences are the result of
rounding.
|
(1)
|
Represents
annualized straight-line rent as of June 30, 2017.
|
(2)
|
Franchise
restaurants operated by Meridian Restaurants Unlimited,
LC.
|
(3)
|
Includes tenants
generating less than 1.5% of annualized base rent.
|
Retail Sectors
The following table presents annualized base rents for the
Company's top retail sectors that represent 2.5% or greater of the
Company's total annualized base rent as of June 30, 2017:
Sector
|
|
Annualized
Base Rent(1)
|
|
Percent of
Annualized
Base Rent
|
|
|
|
|
|
Pharmacy
|
|
$14,782
|
|
13.7%
|
Grocery
Stores
|
|
7,840
|
|
7.3%
|
Restaurants - Quick
Service
|
|
6,783
|
|
6.3%
|
Discount
Apparel
|
|
6,137
|
|
5.7%
|
Auto
Service
|
|
5,977
|
|
5.5%
|
Health &
Fitness
|
|
5,840
|
|
5.4%
|
Home
Improvement
|
|
4,438
|
|
4.1%
|
Convenience
Stores
|
|
4,363
|
|
4.0%
|
Specialty
Retail
|
|
4,261
|
|
3.9%
|
General
Merchandise
|
|
3,956
|
|
3.7%
|
Warehouse
Clubs
|
|
3,749
|
|
3.5%
|
Crafts and
Novelties
|
|
3,521
|
|
3.3%
|
Auto Parts
|
|
3,423
|
|
3.2%
|
Farm and Rural
Supply
|
|
3,361
|
|
3.1%
|
Sporting
Goods
|
|
3,171
|
|
2.9%
|
Dollar
Stores
|
|
3,145
|
|
2.9%
|
Health
Services
|
|
3,066
|
|
2.8%
|
Theaters
|
|
2,978
|
|
2.8%
|
Home
Furnishings
|
|
2,876
|
|
2.7%
|
Other(2)
|
|
14,470
|
|
13.2%
|
Total
Portfolio
|
|
$108,137
|
|
100.0%
|
|
Annualized base
rent is in thousands; any differences are the result of
rounding.
|
(1)
|
Represents
annualized straight-line rent as of June 30, 2017.
|
(2)
|
Includes sectors
generating less than 2.5% of annualized base rent.
|
Geographic Diversification
The following table presents annualized base rents for all
states that represent 2.5% or greater of the Company's total
annualized base rent as of June 30,
2017:
State
|
|
Annualized
Base Rent(1)
|
|
Percent of
Annualized
Base Rent
|
|
|
|
|
|
Michigan
|
|
$13,493
|
|
12.5%
|
Texas
|
|
9,451
|
|
8.7%
|
Florida
|
|
8,129
|
|
7.5%
|
Illinois
|
|
7,849
|
|
7.3%
|
Ohio
|
|
6,817
|
|
6.3%
|
Pennsylvania
|
|
4,495
|
|
4.2%
|
California
|
|
3,697
|
|
3.4%
|
Kentucky
|
|
3,626
|
|
3.4%
|
Louisiana
|
|
3,284
|
|
3.0%
|
Mississippi
|
|
3,283
|
|
3.0%
|
Wisconsin
|
|
3,099
|
|
2.9%
|
Missouri
|
|
2,708
|
|
2.5%
|
Georgia
|
|
2,674
|
|
2.5%
|
Other(2)
|
|
35,532
|
|
32.8%
|
Total
Portfolio
|
|
$108,137
|
|
100.0%
|
|
Annualized base
rent is in thousands; any differences are the result of
rounding.
|
(1)
|
Represents
annualized straight-line rent as of June 30, 2017.
|
(2)
|
Includes states
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 June
30, 2017, assuming no tenants exercise renewal options:
Year
|
Leases
|
|
Annualized
Base Rent(1)
|
|
Percent
of
Annualized
Base Rent
|
|
Gross
Leasable Area
|
|
Percent of
Gross
Leasable Area
|
|
|
|
|
|
|
|
|
|
|
2017
|
1
|
|
$277
|
|
0.3%
|
|
16
|
|
0.2%
|
2018
|
12
|
|
1,628
|
|
1.5%
|
|
305
|
|
3.9%
|
2019
|
14
|
|
4,408
|
|
4.1%
|
|
377
|
|
4.8%
|
2020
|
18
|
|
2,552
|
|
2.4%
|
|
220
|
|
2.8%
|
2021
|
27
|
|
5,456
|
|
5.0%
|
|
330
|
|
4.2%
|
2022
|
23
|
|
4,030
|
|
3.7%
|
|
379
|
|
4.8%
|
2023
|
35
|
|
6,172
|
|
5.7%
|
|
571
|
|
7.3%
|
2024
|
37
|
|
9,196
|
|
8.5%
|
|
882
|
|
11.2%
|
2025
|
37
|
|
7,309
|
|
6.8%
|
|
555
|
|
7.1%
|
2026
|
43
|
|
5,740
|
|
5.3%
|
|
481
|
|
6.1%
|
Thereafter
|
223
|
|
61,369
|
|
56.7%
|
|
3,741
|
|
47.6%
|
Total
Portfolio
|
470
|
|
$108,137
|
|
100.0%
|
|
7,857
|
|
100.0%
|
|
Annualized base
rent and gross leasable area (square feet) are in thousands; any
differences are the result of rounding.
|
(1)
|
Represents
annualized straight-line rent as of June 30, 2017.
|
Capital Markets and Balance Sheet
Capital Markets
On June 16, 2017, the Company
announced it completed a follow-on public offering of 2,415,000
shares of common stock, which included the underwriters' full
exercise of their option to purchase additional shares. Total net
proceeds were approximately $108.0
million after deducting the underwriting discount and
offering expenses.
During the three months ended June 30,
2017, the Company issued 2,500 shares of common stock under
its at-the-market equity program ("ATM program"), realizing gross
proceeds of approximately $0.1
million.
Balance Sheet
As of June 30, 2017, the Company's
net debt-to-recurring EBITDA was 4.6 times and its fixed charge
coverage ratio was 4.0 times. The Company's total debt to total
enterprise value was 24.7%. 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 June 30,
2017, the Company's fully diluted weighted average shares
outstanding were 26.5 million. The basic weighted average
shares outstanding for the three months ended June 30, 2017 were 26.4 million.
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 June 30, 2017, there were 347,619 operating
partnership units outstanding and the Company held a 98.8% interest
in the operating partnership.
2017 Outlook
The Company's outlook for acquisition volume in 2017, which
assumes continued growth in economic activity, moderate interest
rate growth, positive business trends and other significant
assumptions, remains between $250 million
and $275 million of high-quality retail net lease
properties. The Company's disposition guidance for 2017
remains between $30 million and $50
million.
Conference Call/Webcast
The Company will host its quarterly analyst and investor
conference call on Tuesday, July 25,
2017 at 9:00 AM ET. 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 a publicly traded real estate
investment trust 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 417 properties, located in 43 states and containing
approximately 8.0 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, please visit
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, 2016 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 July 24, 2017. 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 share and per-share data)
|
|
|
June 30,
2017
|
|
December 31,
2016
|
Assets:
|
(Unaudited)
|
|
|
Real Estate
Investments:
|
|
|
|
Land
|
$
345,255
|
|
$
309,687
|
Buildings
|
805,271
|
|
703,506
|
Accumulated
depreciation
|
(75,841)
|
|
(69,696)
|
Property under
development
|
6,665
|
|
6,764
|
Net real estate
investments
|
1,081,350
|
|
950,261
|
Real estate held for
sale, net
|
5,409
|
|
-
|
Cash and cash
equivalents
|
4,173
|
|
33,395
|
Accounts receivable -
tenants, net of allowance of $100 and $50 for possible losses
at
June 30, 2017 and December 31, 2016, respectively
|
14,243
|
|
11,535
|
Credit facility
finance costs, net of accumulated amortization of $230 and $1,262
at
June 30, 2017 and December 31, 2016, respectively
|
1,352
|
|
1,552
|
Leasing costs, net of
accumulated amortization of $733 and $677 at June 30, 2017
and December 31, 2016, respectively
|
1,546
|
|
1,227
|
Lease intangibles,
net of accumulated amortization of $32,997 and $25,666 at June
30, 2017 and December 31, 2016, respectively
|
172,928
|
|
139,871
|
Interest rate
swaps
|
1,285
|
|
1,409
|
Other
assets
|
4,554
|
|
2,722
|
Total
Assets
|
$
1,286,840
|
|
$
1,141,972
|
|
|
|
|
Liabilities:
|
|
|
|
Mortgage notes
payable, net
|
$
68,003
|
|
$
69,067
|
Unsecured term loans,
net
|
158,437
|
|
158,679
|
Senior unsecured
notes, net
|
159,218
|
|
159,176
|
Unsecured revolving
credit facility
|
48,000
|
|
14,000
|
Dividends and
distributions payable
|
14,637
|
|
13,124
|
Deferred
revenue
|
1,794
|
|
1,823
|
Accrued interest
payable
|
2,216
|
|
2,210
|
Accounts payable and
accrued expenses:
|
|
|
|
Capital
expenditures
|
68
|
|
677
|
Operating
|
5,989
|
|
4,866
|
Lease intangibles,
net of accumulated amortization of $9,132 and $7,079 at June
30,
2017 and December 31, 2016, respectively
|
30,186
|
|
30,047
|
Interest rate
swaps
|
1,539
|
|
1,994
|
Deferred income
taxes
|
705
|
|
705
|
Tenant
deposits
|
96
|
|
94
|
Total
Liabilities
|
490,888
|
|
456,462
|
|
|
|
|
Equity:
|
|
|
|
Common stock, $.0001
par value, 45,000,000 shares authorized, 28,637,180 and
26,164,977 shares issued and outstanding at June 30, 2017 and
December 31. 2016,
respectively
|
3
|
|
3
|
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
|
820,134
|
|
712,069
|
Dividends in excess
of net income
|
(26,547)
|
|
(28,558)
|
Accumulated other
comprehensive income (loss)
|
(211)
|
|
(536)
|
Equity - Agree Realty
Corporation
|
793,379
|
|
682,978
|
Non-controlling
interest
|
2,573
|
|
2,532
|
Total
Equity
|
795,952
|
|
685,510
|
Total Liabilities and
Equity
|
$
1,286,840
|
|
$
1,141,972
|
Agree Realty
Corporation
|
Consolidated
Statements of Operations and Comprehensive Income
|
($ in thousands,
except share and per share-data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
|
|
|
|
|
|
Minimum
rents
|
$
25,160
|
|
$
19,912
|
|
$
49,174
|
|
$
38,403
|
Percentage
rents
|
-
|
|
7
|
|
212
|
|
190
|
Operating cost
reimbursement
|
2,881
|
|
1,934
|
|
5,225
|
|
3,523
|
Other
income
|
39
|
|
(9)
|
|
29
|
|
(48)
|
Total
Revenues
|
28,080
|
|
21,844
|
|
54,640
|
|
42,068
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
Real estate
taxes
|
2,031
|
|
1,438
|
|
3,839
|
|
2,561
|
Property operating
expenses
|
915
|
|
929
|
|
1,710
|
|
1,501
|
Land lease
payments
|
163
|
|
163
|
|
327
|
|
327
|
General and
administrative
|
2,569
|
|
2,042
|
|
5,174
|
|
4,087
|
Depreciation and
amortization
|
7,704
|
|
5,665
|
|
14,728
|
|
10,750
|
Total Operating
Expenses
|
13,382
|
|
10,237
|
|
25,778
|
|
19,226
|
|
|
|
|
|
|
|
|
Income from
Operations
|
14,698
|
|
11,607
|
|
28,862
|
|
22,842
|
|
|
|
|
|
|
|
|
Other (Expense)
Income
|
|
|
|
|
|
|
|
Interest expense,
net
|
(4,411)
|
|
(3,497)
|
|
(8,547)
|
|
(7,145)
|
Gain on sale of
assets, net
|
4,780
|
|
2,718
|
|
9,521
|
|
2,718
|
|
|
|
|
|
|
|
|
Net Income
|
15,067
|
|
10,828
|
|
29,836
|
|
18,415
|
|
|
|
|
|
|
|
|
Less net income
attributable to non-controlling interest
|
191
|
|
167
|
|
384
|
|
293
|
|
|
|
|
|
|
|
|
Net Income Attributable to
Agree Realty Corporation
|
$
14,876
|
|
$
10,661
|
|
$
29,452
|
|
$
18,122
|
|
|
|
|
|
|
|
|
Net Income Per
Share Attributable to Agree Realty Corporation
|
|
|
|
|
|
|
|
Basic
|
$
0.56
|
|
$
0.48
|
|
$
1.13
|
|
$
0.85
|
Diluted
|
$
0.56
|
|
$
0.48
|
|
$
1.12
|
|
$
0.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income
|
|
|
|
|
|
|
|
Net income
|
$
15,067
|
|
$
10,828
|
|
$
29,836
|
|
$
18,415
|
Other Comprehensive
Income (Loss) - Gain (Loss) on Interest Rate Swaps
|
(411)
|
|
(1,677)
|
|
330
|
|
(4,613)
|
Total Comprehensive
Income
|
14,656
|
|
9,151
|
|
30,166
|
|
13,802
|
Comprehensive Income
Attributable to Non-Controlling Interest
|
(189)
|
|
(140)
|
|
(389)
|
|
(220)
|
Comprehensive Income
Attributable to Agree Realty Corporation
|
$
14,467
|
|
$
9,011
|
|
$
29,777
|
|
$
13,582
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares Outstanding - Basic
|
26,389,703
|
|
22,185,525
|
|
26,172,730
|
|
21,315,541
|
Weighted Average
Number of Common Shares Outstanding - Diluted
|
26,457,340
|
|
22,265,139
|
|
26,240,220
|
|
21,385,098
|
|
|
|
|
|
|
|
|
Agree Realty
Corporation
|
Reconciliation of
Net Income to FFO and Adjusted FFO
|
($ in thousands,
except share and per-share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Net income
|
$
15,067
|
|
$
10,828
|
|
$
29,836
|
|
$
18,415
|
Depreciation of real
estate assets
|
4,700
|
|
3,595
|
|
9,185
|
|
6,957
|
Amortization of
leasing costs
|
40
|
|
24
|
|
80
|
|
47
|
Amortization of lease
intangibles
|
2,939
|
|
2,028
|
|
5,412
|
|
3,712
|
(Gain) loss on sale
of assets, net
|
(4,780)
|
|
(2,718)
|
|
(9,521)
|
|
(2,718)
|
Funds from
Operations
|
$
17,966
|
|
$
13,757
|
|
$
34,992
|
|
$
26,413
|
Straight-line accrued
rent
|
(877)
|
|
(656)
|
|
(1,685)
|
|
(1,306)
|
Deferred revenue
recognition
|
-
|
|
(116)
|
|
-
|
|
(232)
|
Stock based
compensation expense
|
594
|
|
601
|
|
1,276
|
|
1,309
|
Amortization of
financing costs
|
142
|
|
122
|
|
284
|
|
239
|
Non-real estate
depreciation
|
25
|
|
18
|
|
51
|
|
35
|
Adjusted Funds from
Operations
|
$
17,850
|
|
$
13,726
|
|
$
34,918
|
|
$
26,458
|
|
|
|
|
|
|
|
|
Funds from Operations
per common share - Basic
|
$
0.67
|
|
$
0.61
|
|
$
1.32
|
|
$
1.22
|
Funds from Operations
per common share - Diluted
|
$
0.67
|
|
$
0.61
|
|
$
1.32
|
|
$
1.22
|
|
|
|
|
|
|
|
|
Adjusted Funds from
Operations per common share - Basic
|
$
0.67
|
|
$
0.61
|
|
$
1.32
|
|
$
1.22
|
Adjusted Funds from
Operations per common share - Diluted
|
$
0.67
|
|
$
0.61
|
|
$
1.31
|
|
$
1.22
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares and Units Outstanding - Basic
|
26,737,322
|
|
22,533,144
|
|
26,520,349
|
|
21,663,160
|
Weighted Average
Number of Common Shares and Units Outstanding - Diluted
|
26,804,959
|
|
22,612,758
|
|
26,587,839
|
|
21,732,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information:
|
|
|
|
|
|
|
|
Scheduled principal
repayments
|
$
776
|
|
$
728
|
|
$
1,545
|
|
$
1,448
|
Capitalized
interest
|
87
|
|
6
|
|
154
|
|
13
|
Capitalized building
improvements
|
27
|
|
29
|
|
43
|
|
29
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Measures
Funds from Operations ("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 as alternatives 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. These measurements do 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 Funds from Operations
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.
Any differences are a result of rounding.
|
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SOURCE Agree Realty Corporation