BEACHWOOD, Ohio, July 29, 2015 /PRNewswire/ -- DDR Corp. (NYSE: DDR) today announced operating results for the second quarter ended June 30, 2015. 

(Logo: http://photos.prnewswire.com/prnh/20131217/DDRLOGO )

Financial Highlights

  • Second quarter operating funds from operations attributable to common shareholders ("Operating FFO") increased $10.1 million to $111.4 million, or $0.31 per diluted share, compared to $101.3 million, or $0.28 per diluted share, for the prior-year comparable period.
  • Second quarter net income attributable to common shareholders was $13.0 million, or $0.03 per diluted share, which compares to net income of $67.8 million, or $0.19 per diluted share, for the prior-year comparable period.

Significant Quarterly Activity

  • Generated same store net operating income growth of 3.0% on a pro rata basis
  • Executed 369 new leases and renewals for 2.9 million square feet
  • The annualized base rent per occupied square foot was $14.37 at June 30, 2015 as compared to $13.72 at June 30, 2014, an increase of 4.7% on a pro rata basis
  • Generated new leasing spreads of 25.4% on a pro rata basis, and renewal leasing spreads of 7.2% on a pro rata basis
  • The portfolio leased rate was 95.8% at June 30, 2015 and 2014 on a pro rata basis
  • Acquired $111 million of wholly-owned prime power centers
  • Sold ten assets totaling $60 million at DDR's share
  • Repaid $153 million, 5.50% senior unsecured notes at maturity
  • Amended and restated $750 million unsecured revolving credit facility to extend the final maturity date to June 2020, including options. The smaller unsecured revolving credit facility was also amended to reduce the commitment to $50 million and modify certain other terms to conform to the primary facility. Pricing on both amended revolving credit facilities was reduced and is currently set at LIBOR plus 100 basis points, a decrease of 15 basis points from the previous rate, and is determined based upon DDR's credit ratings.
  • Entered into a $400 million unsecured term loan with Wells Fargo Bank, as administrative agent, and PNC Bank, as syndication agent. The unsecured term loan has a maturity date of April 2020, including options. Pricing on the unsecured term loan is currently set at LIBOR plus 110 basis points and is determined based upon DDR's credit ratings. There was $300 million drawn at June 30, 2015.
  • Repaid $257 million of mortgage debt that had encumbered four prime power centers

"We are pleased to report another strong quarter of operational and transactional results driving an increase in earnings," commented David J. Oakes, president and chief executive officer of DDR.  "Our portfolio transformation and operating platform continue to drive earnings growth and generate net asset value for our shareholders."

2015 Guidance

  • There has been no change in Operating FFO per share guidance since the initial release on January 7, 2015.  The Company continues to estimate Operating FFO for 2015 between $1.20 and $1.25 per diluted share.

Non-GAAP Disclosures
 FFO is a supplemental non-GAAP financial measurement used as a standard in the real estate industry and a widely accepted measure of real estate investment trust ("REIT") performance.  Management believes that FFO and Operating FFO provide additional indicators of the financial performance of a REIT.  The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group.  Neither FFO nor Operating FFO represents cash generated from operating activities in accordance with generally accepted accounting principles ("GAAP"), is necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to net income computed in accordance with GAAP as an indicator of the Company's operating performance or as an alternative to cash flow as a measure of liquidity.

FFO is defined and calculated by the Company as net income, adjusted to exclude:  (i) preferred share dividends, (ii) gains and losses from disposition of depreciable real estate property, which are presented net of taxes, (iii) impairment charges on depreciable real estate property and related investments, (iv) extraordinary items and (v) certain non-cash items.  These non-cash items principally include real property depreciation and amortization of intangibles, equity income from joint ventures and equity income from non-controlling interests and adding the Company's proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis.  The Company calculates Operating FFO by excluding the non-operating charges and gains described below.  The Company computes FFO in accordance with the NAREIT definition.  Other real estate companies may calculate FFO and Operating FFO in a different manner.  Operating FFO is useful to investors as the Company removes these charges and gains to analyze the results of its operations and assess performance of the core operating real estate portfolio.  A reconciliation of net income (loss) to FFO and Operating FFO is presented herein.

Safe Harbor
 DDR Corp. considers portions of the information in this press release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company's expectation for future periods.  Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.  For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements.  There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, local conditions such as oversupply of space or a reduction in demand for real estate in the area; competition from other available space; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant; constructing properties or expansions that produce a desired yield on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements or our failure to satisfy conditions to the completion of these arrangements; the success of our capital recycling strategy; and the finalization of the financial statements for the three months ended June 30, 2015.  For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company's Form 10-K for the year ended December 31, 2014, as amended.  The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

About DDR Corp.
 DDR is an owner and manager of 401 value-oriented shopping centers representing 119 million square feet in 41 states and Puerto Rico.  The Company's portfolio is comprised primarily of large-format power centers located in top U.S. markets, and is actively managed to create long-term shareholder value. DDR is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol DDR.  Additional information about the Company is available at www.ddr.com.

Conference Call and Supplemental Information
 A copy of the Company's Supplemental package is available upon request to Brooke Vanek at the Company's corporate office, 3300 Enterprise Parkway, Beachwood, Ohio 44122 or at www.ddr.com.

The Company will hold its quarterly conference call tomorrow, July 30, 2015, at 10:00 a.m. Eastern Time.  To participate, please dial 877.249.1119 (domestic) or 412.542.4143 (international) at least ten minutes prior to the scheduled start of the call.  The conference call webcast will be recorded and available for replay through the Investors portion of DDR's website, http://ir.ddr.com/events.cfm.

 

 



DDR Corp.

Income Statement:  Consolidated Interests









$ in thousands, except per share








2Q15

2Q14

6M15

6M14

Revenues:






Minimum rents (1)

$179,363

$169,395

$360,060

$335,582

Percentage rent

1,372

624

2,757

2,265

Recoveries

62,021

56,031

126,101

113,831

Ancillary income

4,648

5,935

8,866

12,138

Other revenues (2)

1,528

2,176

1,898

3,634


248,932

234,161

499,682

467,450

Expenses (3):






Operating and maintenance

36,029

33,990

74,755

70,577

Real estate taxes

37,797

35,085

75,426

69,061


73,826

69,075

150,181

139,638









Net operating income

175,106

165,086

349,501

327,812









Other income (expense):






Fee income

8,391

7,879

16,466

16,102

Interest income

7,211

3,158

14,372

6,286

Interest expense (4)

(61,287)

(59,634)

(124,307)

(119,332)

Depreciation and amortization

(99,300)

(95,203)

(202,315)

(198,823)

General and administrative (5)

(19,271)

(19,085)

(37,866)

(39,338)

Other income (expense), net (6)

2,368

(4,100)

(1,060)

(8,283)

Impairment charges (7)

0

(14,342)

(279,021)

(16,671)

Income (loss) before earnings from equity method
   investments and other items

13,218

(16,241)

(264,230)

(32,247)









Equity in net income of joint ventures

1,642

1,131

1,703

6,621

Impairment of joint venture investments

0

0

0

(9,100)

(Loss) gain on sale and change in control of interests, net

(6,507)

83,830

7,772

83,830

Income from discontinued operations (8)

0

7,345

0

10,357

Tax expense

(573)

(642)

(5,473)

(1,327)

Gain on disposition of real estate, net of tax

11,267

1,472

36,361

383

Net income (loss)

19,047

76,895

(223,867)

58,517

Non-controlling interests (9)

(449)

(878)

(1,322)

860

Net income (loss) attributable to DDR

18,598

76,017

(225,189)

59,377

Write-off of preferred share original issuance costs

0

(1,943)

0

(1,943)

Preferred dividends

(5,594)

(6,259)

(11,188)

(12,867)

Net income (loss) attributable to Common Shareholders

13,004

67,815

(236,377)

44,567

FFO:






Net income (loss) attributable to common shareholders

13,004

67,815

(236,377)

44,567

Depreciation and amortization of real estate investments

97,239

97,677

198,106

204,744

Equity in net income of joint ventures

(1,642)

(1,131)

(1,703)

(6,621)

Joint ventures' FFO

7,502

7,377

14,519

16,120

Non-controlling interests (OP units)

248

223

497

285

Impairment of depreciable real estate

0

1,102

179,748

11,491

Gain on disposition of depreciable real estate, net

(11,312)

(90,937)

(36,548)

(102,648)

FFO attributable to Common Shareholders

105,039

82,126

118,242

167,938

Non-operating items, net (10)

6,357

19,137

100,287

34,035

Operating FFO

$111,396

$101,263

$218,529

$201,973

FFO per share – Diluted (11)

$0.29

$0.23

$0.33

$0.47

Operating FFO per share – Diluted (11)

$0.31

$0.28

$0.60

$0.56





















DDR Corp.

Balance Sheet:  Consolidated Interests







$ in thousands



At Period End





2Q15

4Q14

Assets:






Land



$2,208,102

$2,208,468

Buildings



6,988,655

7,087,040

Fixtures and tenant improvements



672,612

645,035






9,869,369

9,940,543

Less: Accumulated depreciation



(1,998,760)

(1,909,585)






7,870,609

8,030,958

Construction in progress and land



311,005

395,242

Real estate, net



8,181,614

8,426,200









Investments in and advances to joint ventures



399,218

414,848

Cash



25,268

20,937

Restricted cash



11,417

11,375

Notes receivable, net



47,304

56,245

Receivables, including straight-line rent, net



128,509

132,661

Other assets, net (12)



432,257

479,629

Total Assets



9,225,587

9,541,895









Liabilities and Equity:






Revolving credit facilities



241,474

29,009

Unsecured debt



3,115,459

2,765,893

Unsecured term loan



300,000

350,000

Mortgage and other secured debt



1,603,231

2,089,805






5,260,164

5,234,707

Dividends payable



67,884

61,468

Other liabilities (13)



450,070

448,192

Total Liabilities



5,778,118

5,744,367









Preferred shares



350,000

350,000

Common shares



36,117

36,071

Paid-in-capital



5,448,298

5,438,778

Accumulated distributions in excess of net income



(2,408,151)

(2,047,212)

Deferred compensation obligation



16,980

16,609

Accumulated other comprehensive income



(6,137)

(7,352)

Less: Common shares in treasury at cost



(16,819)

(16,646)

Non-controlling interests



27,181

27,280

Total Equity



3,447,469

3,797,528









Total Liabilities and Equity



$9,225,587

$9,541,895



























DDR Corp.

Income Statement:  Unconsolidated Interests at 100%









$ in thousands








2Q15

2Q14

6M15

6M14

Revenues:






Minimum rents

$98,437

$82,910

$202,174

$181,475

Percentage rent

353

324

942

733

Recoveries

30,603

21,309

61,462

43,192

Other revenues

3,673

7,598

6,088

23,241


133,066

112,141

270,666

248,641

Expenses:






Operating and maintenance

30,944

26,611

63,655

61,746

Real estate taxes

17,470

12,584

35,741

25,256


48,414

39,195

99,396

87,002









Net operating income

84,652

72,946

171,270

161,639









Other income (expense):






Interest expense

(33,593)

(41,787)

(74,496)

(91,844)

Depreciation and amortization

(51,482)

(34,517)

(108,219)

(75,730)

Impairment charges

0

(600)

(448)

(600)

Tax expense

0

(2,425)

0

(6,565)

Other income (expense), net

(217)

252

(584)

(2,790)


(85,292)

(79,077)

(183,747)

(177,529)









Loss from continuing operations

(640)

(6,131)

(12,477)

(15,890)

Loss from discontinued operations

0

(1,695)

0

(4,187)

Gain on disposition of discontinued operations, net

0

2,038

0

23,511

Loss on disposition of real estate, net

(1,358)

0

(1,571)

0

Non-controlling interests

0

(535)

0

(2,023)

Net (loss) income attributable to unconsolidated joint ventures

(1,998)

(6,323)

(14,048)

1,411

Depreciation and amortization of real estate investments

51,482

38,272

108,219

82,447

Impairment of depreciable real estate

0

600

448

600

Loss (gain) on disposition of depreciable real estate, net

1,358

(1,947)

1,571

(23,420)

FFO

50,842

30,602

96,190

61,038

FFO at DDR's ownership interests

7,502

7,377

14,519

16,120

Operating FFO at DDR's ownership interests

7,501

7,158

14,523

16,253









Net income at DDR's ownership interests

1,317

1,436

1,070

6,167

Basis differences

325

(305)

633

454

Equity in net income of joint ventures

$1,642

$1,131

$1,703

$6,621





















DDR Corp.

Balance Sheet:  Unconsolidated Interests at 100%







$ in thousands



At Period End






2Q15

4Q14

Assets:






Land



$1,346,862

$1,439,849

Buildings



3,566,004

3,854,585

Fixtures and tenant improvements



184,661

200,696






5,097,527

5,495,130

Less: Accumulated depreciation



(770,122)

(773,256)






4,327,405

4,721,874

Land held for development and construction in progress



54,209

55,698

Real estate, net



4,381,614

4,777,572

Cash and restricted cash



80,234

100,812

Receivables, including straight-line rent, net



48,814

80,508

Other assets, net



346,595

394,751

Total Assets



4,857,257

5,353,643









Liabilities and Equity:






Mortgage debt



3,247,337

3,552,764

Notes and accrued interest payable to DDR



3,031

144,831

Other liabilities



205,924

276,998

Total Liabilities



3,456,292

3,974,593









Redeemable preferred equity



309,150

305,310

Accumulated equity



1,091,815

1,073,740

Total Liabilities and Equity



$4,857,257

$5,353,643












DDR Corp.

Financial Statements:  Footnotes




$ in millions, except per share


Includes discontinued operations

2Q15

2Q14

6M15

6M14









(1)

Minimum rents:







Straight-line rent, net

$0.7

$1.5

$2.1

$2.5

Below-market rent, net

0.9

0.7

1.2

0.6

Ground lease revenue

9.3

8.1

18.4

16.0









(2)

Other revenues:







Lease termination fees

1.4

2.0

1.6

3.3

Other miscellaneous

0.1

0.2

0.3

0.4









(3)

Operating expenses:







Recoverable expenses (2014 excludes sold assets)

(67.8)

(62.4)

(138.5)

(125.3)

Non-recoverable expenses (2014 excludes sold assets)

(6.0)

(6.7)

(11.7)

(14.3)

Straight-line ground rent expense

(0.1)

(0.3)

(0.3)

(0.6)

Expensed costs of suspended developments

(0.2)

(0.3)

(0.3)

(0.7)









(4)

Non-cash interest expense:







Convertible debt accretion

(3.0)

(2.8)

(5.9)

(5.6)

Debt fair value amortization

4.5

4.1

9.8

8.4

Loan cost amortization

(2.4)

(3.1)

(5.0)

(6.3)

Interest expense (capitalized)

1.6

2.2

3.2

4.0









(5)

General and administrative expenses:







Executive separation charges

(1.7)

(0.0)

(2.3)

(0.0)

Stock compensation expenses

(1.5)

(2.0)

(3.6)

(3.9)

Internal leasing expenses

(1.7)

(1.8)

(3.7)

(3.8)

Construction administrative costs (capitalized)

2.2

2.5

4.6

4.9









(6)

Other income (expense):







Transactions and other, net

(0.0)

(3.4)

(0.2)

(7.3)

Litigation expenses

(0.0)

(0.7)

(0.0)

(1.0)

Debt extinguishment, net

2.4

0.0

(0.9)

0.0









(7)

Impairment charges:







Assets marketed for sale

(0.0)

(1.1)

(179.7)

(11.5)

Land previously held for development

(0.0)

(13.2)

(99.3)

(13.7)



























DDR Corp.

Financial Statements:  Footnotes




$ in millions, except per share


Includes discontinued operations

2Q15

2Q14

6M15

6M14









(8)

Discontinued operations:







Revenues

n/a 

$11.5

n/a 

$25.6

Expenses

n/a 

(6.0)

n/a 

(13.5)

Impairments

n/a 

(0.0)

n/a 

(8.5)

Depreciation

n/a 

(4.7)

n/a 

(10.4)

Gain on disposition of real estate, net

n/a 

6.5

n/a 

17.2

Net income

n/a 

7.3

n/a 

10.4



Note:  Presented for 2014 only as DDR adopted the new accounting guidance on January 1, 2015, which changed the definition for reporting.









(9)

Non-controlling interests:







FFO attributable to non-controlling interests

(0.3)

(0.2)

(0.9)

(0.4)

Operating FFO attributable to non-controlling interests

(0.3)

(0.2)

(0.5)

(0.4)









(10)

Non-operating items excluded from Operating FFO:







Non-cash impairment charges – non-depreciable assets

0.0

13.2

99.3

22.8

Executive separation charges

1.7

0.0

2.3

0.0

Transaction, debt extinguishment, litigation, other, net

(1.9)

4.5

1.5

9.3

Joint ventures – transaction, currency, other

0.0

(0.2)

0.0

0.1

Non-cash loss (gain) on sale and change in control of interests, net

6.5

0.0

(7.8)

0.0

Tax expense (primarily Puerto Rico restructuring)

0.0

0.0

4.4

0.0

Loss (gain) on sale of non-depreciable real estate, net

0.1

(0.3)

0.6

(0.1)

Non-cash write-off of preferred share original issuance costs

0.0

1.9

0.0

1.9


6.4

19.1

100.3

34.0

(11)

Outstanding per share information:







Common shares (at quarter end)

361.1

359.6

361.1

359.6

OP units (at quarter end)

1.4

1.4

1.4

1.4

Total shares and units (at quarter end)

362.5

361.0

362.5

361.0

Weighted average shares and units – Basic – EPS

360.1

357.8

359.9

357.7

Assumed conversion of dilutive securities

4.1

0.5

0.0

0.5

Weighted average shares and units – Diluted – EPS

364.2

358.3

359.9

358.2

Weighted average shares and units – Basic – FFO & OFFO

362.5

360.1

362.4

359.8

Assumed conversion of dilutive securities

0.4

0.5

0.5

0.5

Weighted average shares and units – Diluted – FFO & OFFO

362.9

360.6

362.9

360.3

Earnings per common share – Basic & Diluted

$0.03

$0.19

$(0.66)

$0.12

FFO per share – Basic & Diluted

$0.29

$0.23

$0.33

$0.47

Operating FFO per share – Diluted

$0.31

$0.28

$0.60

$0.56

Common stock dividends declared, per share

$0.1725

$0.155

$0.345

$0.31









(12)

Intangible assets, net (at quarter and year end)



353.2

389.2









(13)

Below-market leases, net (at quarter and year end)



149.9

139.3
























DDR Corp.

Financial Statements:  Footnotes








Additional financial information







2Q15

2Q14

6M15

6M14










Capital expenditures (DDR share):







Retenanting

$10.7

$9.3

$22.7

$20.6

Maintenance – total

4.3

2.1

5.9

3.2

Maintenance PSF of owned GLA – non reimbursable



0.04

0.04










Miscellaneous (DDR share):







Est. value of land owned adjacent to existing centers (at quarter end)



26.5


Cost basis of headquarters (non-income producing at quarter end)



40.0

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ddr-reports-a-107-increase-in-operating-ffo-per-diluted-share-to-031-for-the-quarter-ended-june-30-2015-300120826.html

SOURCE DDR Corp.

Copyright 2015 PR Newswire

Developers Realty (NYSE:DDR)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Developers Realty Charts.
Developers Realty (NYSE:DDR)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Developers Realty Charts.