UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 29, 2015

DDR Corp.

(Exact name of registrant as specified in its charter)

 

Ohio   1-11690   34-1723097

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

3300 Enterprise Parkway, Beachwood, Ohio   44122
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (216) 755-5500

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02 Results of Operations and Financial Condition.

On July 29, 2015, DDR Corp. (the “Company”) issued a News Release containing financial results of the Company (the “News Release”) and a quarterly financial supplement containing financial and property information of the Company (“Quarterly Supplement”) for the three and six months ended June 30, 2015. Among other things, the News Release reports net income of $0.03 per diluted share for the three months ended June 30, 2015, and net loss of $0.66 per diluted share for the six months ended June 30, 2015, as compared to net income of $0.19 and $0.12 per diluted share for the three and six months ended June 30, 2014, respectively. A copy of the News Release is attached hereto as Exhibit 99.1 and a copy of the Quarterly Financial Supplement is attached hereto as Exhibit 99.2 and are each incorporated herein by reference. This information shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as shall be set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
No.

  

Description

99.1    News release dated as of July 29, 2015.
99.2    Quarterly financial supplement dated as of June 30, 2015.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

DDR CORP.

By:  

/s/ Christa A. Vesy

Name:   Christa A. Vesy
Title:  

Executive Vice President

and Chief Accounting Officer

Date: July 29, 2015


EXHIBIT INDEX

 

Exhibit
No.

  

Description

99.1    News release dated as of July 29, 2015.
99.2    Quarterly financial supplement dated as of June 30, 2015.


Exhibit 99.1

 

LOGO

For immediate release:

 

Media Contact:      Investor Contact:
Matt Schuler      Matt Lougee
mschuler@ddr.com      mlougee@ddr.com
216.755.5500      216.755.5500

DDR REPORTS A 10.7% INCREASE IN OPERATING FFO PER DILUTED SHARE TO $0.31

FOR THE QUARTER ENDED JUNE 30, 2015

BEACHWOOD, OHIO, July 29, 2015 – DDR Corp. (NYSE: DDR) today announced operating results for the second quarter ended June 30, 2015.

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

 

 

         2Q15      2Q14      6M15      6M14  
Additional financial information            
 

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     

 



Exhibit 99.2

 

LOGO


DDR Corp.

Table of Contents

 

Section

   Page  

Earnings Release & Financial Statements

  

Press Release

     1 - 9   

Asset Summary

  

Portfolio Summary

     10   

Portfolio Detail

     11   

Leasing Summary

     12   

Top 50 Tenants

     13   

Top 50 Assets by ABR at DDR Share

     14   

Investments

  

Transactions

     15   

Developments/Redevelopments

     16   

Joint Ventures

  

Summary

     17   

Income Statement

     18   

Balance Sheet

     19   

Balance Sheet Summary

  

Capital Structure

     20   

Debt/EBITDA

     21   

Debt Summary

     22   

Consolidated Debt Detail

     23 - 25   

Unconsolidated Debt Detail

     26 - 27   

Analyst Information and Reporting Policies

  

Analyst Coverage

     28   

Notable Policies

     29 - 30   

Property list available online at http://www.ddr.com

DDR considers portions of this information 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 expectations 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 the results of the Company 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; ability to sell assets on commercially reasonable terms; ability to secure equity or debt financing on commercially acceptable terms or at all; or 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; 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 these 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.


LOGO

For immediate release:

 

Media Contact:      Investor Contact:
Matt Schuler      Matt Lougee
mschuler@ddr.com      mlougee@ddr.com
216.755.5500      216.755.5500

DDR REPORTS A 10.7% INCREASE IN OPERATING FFO PER DILUTED SHARE TO $0.31

FOR THE QUARTER ENDED JUNE 30, 2015

BEACHWOOD, OHIO, July 29, 2015 – DDR Corp. (NYSE: DDR) today announced operating results for the second quarter ended June 30, 2015.

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.

 

1


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.

 

2


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  

 

3


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  

 

4


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  

 

5


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  

 

6


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

 

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  

 

8


DDR Corp.

Financial Statements: Footnotes

 

 

         2Q15      2Q14      6M15      6M14  
Additional financial information            
 

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     

 

9


DDR Corp.

Portfolio Summary

$, GLA in millions, except PSF

 

           At 100%                      At
DDR Share
       

Portfolio Metrics

               

Operating Centers

       401               401     

Owned GLA

       79.8               54.6     

Ground Lease GLA

       6.8               5.0     

Additional Unowned

       32.1               32.1     

Base Rent PSF

     $ 14.09             $ 14.37     

Leased Rate

       95.5            95.8  

Commenced Rate

       93.9            94.0  
     Same Store NOI at 100%          Same Store NOI at DDR Share  
     2Q15     2Q14     Change          2Q15     2Q14     Change  

Same Store Leased Rate

     95.5     95.4     0.1        95.8     95.7     0.1

Revenues:

               

Base Rents

   $ 213.5      $ 209.6        1.8      $ 168.4      $ 165.3        1.9

Recoveries

     72.4        69.7        4.0        58.8        56.8        3.5

Other

     4.9        4.0        22.3        4.2        3.4        23.1
  

 

 

   

 

 

   

 

 

      

 

 

   

 

 

   

 

 

 
     290.8        283.3        2.6        231.4        225.5        2.6

Expenses:

               

Operating

     (39.1     (39.0     0.4        (30.7     (30.7     0.2

Real Estate Taxes

     (42.1     (40.8     3.1        (34.4     (33.4     3.0
  

 

 

   

 

 

   

 

 

      

 

 

   

 

 

   

 

 

 
     (81.2     (79.8     1.8        (65.1     (64.0     1.7
  

 

 

   

 

 

   

 

 

      

 

 

   

 

 

   

 

 

 

Same Store NOI

   $ 209.6      $ 203.5        3.0      $ 166.3      $ 161.5        3.0

Non-Same Store NOI

     50.2        34.5             21.5        18.2     
  

 

 

   

 

 

        

 

 

   

 

 

   
   $ 259.8      $ 238.0           $ 187.8      $ 179.7     
Same Store NOI Reconciliation to Income Statement   

Consolidated at 100%:

         Consolidated at DDR Share:   

Revenues

   $ 248.9      $ 234.2        DDR Share    $ 175.1      $ 165.1     

Expenses

     (73.8     (69.1     JV Share      (0.4     (0.4  
  

 

 

   

 

 

        

 

 

   

 

 

   
   $ 175.1      $ 165.1           $ 174.7      $ 164.7     

Unconsolidated at 100%:

         Unconsolidated at DDR Share:   

Revenues

   $ 133.1      $ 112.1        Revenues    $ 20.0      $ 22.8     

Expenses

     (48.4     (39.2     Expenses      (6.9     (7.8  
  

 

 

   

 

 

        

 

 

   

 

 

   
   $ 84.7      $ 72.9           $ 13.1      $ 15.0     
  

 

 

   

 

 

        

 

 

   

 

 

   

Total

   $ 259.8      $ 238.0        Total    $ 187.8      $ 179.7     

 

10


DDR Corp.

Portfolio Detail (at 100% unless otherwise noted)

Lease Expiration Schedule

 

 

     Greater than 10,000 SF          Less than 10,000 SF  
                      
            ABR      Rent     % of                 ABR     Rent     % of  
Year    Leases      (mil)      PSF     ABR          Leases      (mil)     PSF     ABR  

2015

     33       $ 10.2       $ 10.49        1.0        358       $ 19.2      $ 23.39        1.9

2016

     202         63.4         10.99        6.2        931         55.4        22.29        5.4

2017

     216         81.2         10.86        7.9        905         54.3        23.20        5.3

2018

     229         82.3         11.54        8.0        926         64.7        23.94        6.3

2019

     239         93.9         11.13        9.2        691         46.8        23.70        4.6

2020

     190         68.9         11.65        6.7        461         31.7        23.27        3.1

2021

     136         59.7         10.80        5.8        220         18.2        24.92        1.8

2022

     119         46.9         11.17        4.6        209         17.9        24.83        1.7

2023

     118         44.8         10.55        4.4        177         16.6        23.88        1.6

2024

     102         36.2         12.20        3.5        222         20.9        24.01        2.0
  

 

 

    

 

 

    

 

 

   

 

 

      

 

 

    

 

 

   

 

 

   

 

 

 

2015-2024

     1,584       $ 587.5       $ 11.14        57.3        5,100       $ 345.7      $ 23.74        33.7

Total Rent Roll

     1,706       $ 658.5       $ 11.43        64.3        5,420       $ 366.4      $ 23.48        35.7
     Annual Metrics          Leased Rate Breakdown at 100%  
                      
     Period
Ending
     Centers      Leased
Rate
    ABR
PSF
         SF      Leased
Rate
    % of
GLA
    % of
Vacancy
 
     2Q 2015         401         95.5   $ 14.09           < 5,000         86.0     14.8     46.5
     YE 2014         415         95.7     13.91           5,000-9,999         91.2     8.6     16.9
     YE 2013         406         95.0     13.35           > 10,000         97.9     76.6     36.6
               

 

 

    

 

 

   

 

 

   

 

 

 
     YE 2012         444         94.1     12.77           Total         95.5     100.0     100.0
     YE 2011         422         93.3     12.54               
     YE 2010         476         92.3     12.46           Leased Rate Breakdown at DDR Share   
     YE 2009         534         91.2     12.27               
     YE 2008         611         92.6     12.34              Leased        % of        % of   
     YE 2007         619         95.8     12.22           SF         Rate        GLA        Vacancy   
     YE 2006         370         96.2     11.57           < 5,000         86.2     14.2     47.2
     YE 2005         379         96.3     11.30           5,000-9,999         91.1     8.7     18.6
     YE 2004         373         95.4     11.13           > 10,000         98.2     77.1     34.2
               

 

 

    

 

 

   

 

 

   

 

 

 
     YE 2003         274         95.1     10.82           Total         95.8     100.0     100.0
     YE 2002         189         95.9     10.58               
     YE 2001         192         95.4     10.03           Portfolio Concentration at 100%   
     YE 2000         190         96.9     9.66               
     YE 1999         186         95.7     9.20              % of          % of   
     YE 1998         159         96.5     8.99              ABR        MSF        GLA   
     YE 1997         123         96.1     8.49           Florida         10.9     10.2        11.7
     YE 1996         112         94.8     7.85           Georgia         9.4     9.1        10.5
     YE 1995         106         96.3     7.60           Puerto Rico         7.5     4.8        5.5
     YE 1994         84         97.1     5.89           Ohio         7.4     7.1        8.2
     YE 1993         69         96.2     5.60           N. Carolina         6.7     5.4        6.2
     YE 1992         53         95.4     5.37           California         5.1     4.0        4.6
                  New Jersey         4.6     3.2        3.7
                  Illinois         4.5     2.7        3.1
                  Texas         4.3     3.5        4.0
                  New York         3.9     4.4        5.0

 

11


DDR Corp.

Leasing Summary

Leases, GLA, and net effective rents at 100%

All other figures at DDR share

Leasing Activity

 

     # of
Leases
     GLA
(000)
     New
Rent
PSF
     Rent
Spread
    Wtd Avg
Term (Years)
            Vacant < 12 months  
                      # of      GLA  
                      Leases      (000)  

New Leases

                      

1Q15

     124         680       $ 16.88         26.9     9.3            58         325   

2Q15

     146         835         20.35         25.4     9.4            72         372   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

       

 

 

    

 

 

 
     270         1,515       $ 18.74         26.1     9.3            130         697   

Renewals

                      

1Q15

     165         1,931       $ 13.77         6.7     5.6            165         1,931   

2Q15

     223         2,030         15.04         7.2     5.6            223         2,030   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

       

 

 

    

 

 

 
     388         3,961       $ 14.41         6.9     5.6            388         3,961   

New + Renewals

                      

1Q15

     289         2,611       $ 14.61         9.7     6.6            223         2,256   

2Q15

     369         2,865         16.63         10.2     6.7            295         2,402   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

       

 

 

    

 

 

 
     658         5,476       $ 15.65         10.0     6.7            518         4,658   
Net Effective Rents                       
            GLA (000)      Base Rent
PSF
     Capex PSF     Net Effective
Rent PSF
     Wtd Avg
Term (Years)
               

New Leases

                      

1Q15

        578       $ 18.40       ($ 6.14   $ 12.26         8.6         

2Q15

        624         19.51         (5.28     14.23         8.3         
     

 

 

    

 

 

    

 

 

   

 

 

    

 

 

       
        1,202       $ 18.97       ($ 5.71   $ 13.26         8.4         

Renewals

                      

1Q15

        1,931       $ 13.78       ($ 0.03   $ 13.75         5.5         

2Q15

        2,030         15.57         (0.01     15.56         5.4         
     

 

 

    

 

 

    

 

 

   

 

 

    

 

 

       
        3,961       $ 14.70       ($ 0.02   $ 14.68         5.5         

 

12


DDR Corp.

Top 50 Tenants

$, GLA in millions

 

          # of Units      Base Rent      GLA      Credit Ratings
    

Tenant

   Owned      Total      at 100%      % of Total     Pro Rata      at 100%      % of Total     Pro Rata     

(S&P/Moody’s/Fitch)

1

  

TJX Companies (1)

     111         112       $ 37.4         3.4   $ 26.6         3.5         4.0     2.4       A+ / A3 / NR

2

  

Bed Bath & Beyond (2)

     93         94         32.9         3.0     24.0         2.7         3.1     1.9       A- / Baa1 / NR

3

  

PetSmart

     103         104         32.2         3.0     21.5         2.2         2.5     1.4       B+ / NR / NR

4

  

Walmart (3)

     29         76         27.9         2.6     24.9         4.4         5.1     4.0       AA / Aa2 / AA

5

  

Kohl’s

     38         54         25.3         2.3     17.9         3.3         3.8     2.4       BBB / Baa1 / BBB+

6

  

Dick’s Sporting Goods (4)

     40         41         23.5         2.2     14.3         1.9         2.2     1.1       NR

7

  

Ross Stores (5)

     72         72         22.8         2.1     14.2         2.1         2.4     1.3       A- / A3 / NR

8

  

Best Buy

     38         44         22.0         2.0     15.8         1.5         1.7     1.1       BB / Baa2 / BB

9

  

AMC Theatres

     11         12         19.7         1.8     14.5         0.9         1.0     0.6       B+ / NR / NR

10

  

Michaels

     65         67         19.0         1.7     13.1         1.5         1.7     1.0       B+ / NR / NR

11

  

Gap (6)

     66         66         16.6         1.5     12.4         1.1         1.3     0.8       BBB- / Baa3 / BBB-

12

  

Office Depot (7)

     50         54         15.4         1.4     11.0         1.1         1.3     0.8       B- / B2 / NR

13

  

Publix

     35         38         15.1         1.4     3.6         1.7         2.0     0.4       NR

14

  

Ulta

     54         56         13.1         1.2     9.0         0.6         0.7     0.4       NR

15

  

Ascena (8)

     110         110         12.4         1.1     9.6         0.6         0.7     0.5       BB / Ba2 / NR

16

  

Kroger (9)

     25         28         11.1         1.0     4.7         1.3         1.5     0.5       BBB / Baa2 / BBB

17

  

Jo-Ann

     34         34         10.5         1.0     8.3         1.0         1.2     0.8       B / Caa1 / NR

18

  

Lowe’s

     13         33         10.5         1.0     9.5         1.7         2.0     1.5       A- / A3 / NR

19

  

Barnes & Noble

     24         26         10.3         0.9     7.7         0.6         0.7     0.4       NR

20

  

Staples

     36         37         10.1         0.9     6.6         0.7         0.8     0.5       BBB- / Baa2 / BBB-

21

  

LA Fitness

     14         15         9.9         0.9     6.1         0.6         0.7     0.4       NR

22

  

Toys “R” Us (10)

     27         31         9.6         0.9     8.7         1.1         1.3     0.9       B- / B3 / CCC

23

  

Hobby Lobby

     22         25         9.4         0.9     5.0         1.2         1.4     0.7       NR

24

  

Dollar Tree Stores

     83         86         9.3         0.9     6.5         0.8         0.9     0.6       BB / Ba2 / NR

25

  

Petco

     36         38         9.3         0.9     6.8         0.5         0.6     0.4       B / B3 / NR

26

  

Home Depot

     10         41         9.2         0.8     9.0         1.1         1.3     1.0       A / A2 / A

27

  

Regal Cinemas

     10         11         9.1         0.8     7.1         0.6         0.7     0.5       B+ / B1 / B+

28

  

DSW

     25         26         9.0         0.8     6.0         0.6         0.7     0.4       NR

29

  

Cinemark

     10         10         8.9         0.8     6.9         0.6         0.7     0.5       BB / NR / NR

30

  

Sports Authority

     16         17         8.6         0.8     8.6         0.7         0.8     0.6       NR / Caa1 / NR

31

  

Party City

     41         42         8.0         0.7     5.9         0.5         0.6     0.4       NR

32

  

Royal Ahold (11)

     9         9         7.5         0.7     2.9         0.5         0.6     0.2       BBB / Baa3 / BBB

33

  

Nordstrom Rack

     11         12         7.2         0.7     6.2         0.4         0.5     0.3       A- / Baa1 / BBB+

34

  

Burlington

     13         13         6.8         0.6     5.0         1.0         1.2     0.7       B+ / NR / NR

35

  

Pier 1 Imports

     32         37         6.8         0.6     4.9         0.3         0.3     0.2       B+ / NR / NR

36

  

Five Below

     50         50         6.7         0.6     4.9         0.4         0.5     0.3       NR

37

  

Whole Foods

     6         6         6.3         0.6     4.6         0.3         0.3     0.2       BBB- / NR / NR

38

  

hhgregg

     18         19         6.1         0.6     4.3         0.6         0.7     0.4       NR

39

  

Giant Eagle

     6         7         6.0         0.5     3.3         0.5         0.6     0.3       NR

40

  

BJ’s Wholesale Club

     5         6         5.8         0.5     3.0         0.5         0.6     0.3       B- / B3 / NR

41

  

AT&T

     63         64         5.7         0.5     4.4         0.2         0.2     0.1       BBB+ / Baa1 / A-

42

  

Mattress Firm

     46         47         5.5         0.5     3.7         0.2         0.2     0.1       B / B2 / NR

43

  

Panera

     41         42         5.4         0.5     3.8         0.2         0.2     0.1       NR

44

  

Beall’s

     18         19         5.4         0.5     2.6         0.7         0.8     0.4       NR

45

  

Famous Footwear

     38         38         5.3         0.5     4.2         0.3         0.3     0.2       BB / Ba3 / NR

46

  

Stein Mart

     17         17         5.0         0.5     3.2         0.6         0.7     0.4       NR

47

  

Gamestop

     102         102         5.0         0.5     3.7         0.2         0.2     0.1       BB+ / Ba1 / NR

48

  

Sears (12)

     14         15         4.8         0.4     3.5         1.3         1.5     0.9       CCC+ / Caa1 / CC

49

  

Shoe Carnival

     31         31         4.8         0.4     3.2         0.4         0.5     0.2       NR

50

  

Men’s Wearhouse

     34         34         4.6         0.4     3.4         0.2         0.2     0.2       B+ / Ba3 / NR
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    
  

Top 50 Total

     1,895         2,068       $ 598.8         54.9   $ 420.6         51.5         59.5     35.8      
  

Total Portfolio

         $ 1,091.1         100.0   $ 764.1         86.6         100.0     59.6      

 

(1)  T.J. Maxx (49) / Marshalls (44) / HomeGoods (17) / Sierra Trading (1)
(2)  Bed Bath (59) / World Market (21) / buybuy Baby (11) / CTS (2)

(3)   Walmart (24) / Sam’s Club (3) / Neighborhood Market (2)

(4)  Dick’s Sporting Goods (37) / Golf Galaxy (2) / Field & Stream (1)
(5)  Ross Dress For Less (69) / dd’s Discounts (3)
(6)  Gap (5) / Old Navy (58) / Banana Republic (3)
(7)  Office Depot (18) / OfficeMax (32)
(8) Catherine’s (8) / Dress Barn (30) / Justice (26) / Lane Bryant (29) / Maurice’s (17)
(9)  Kroger (17) / Harris Teeter (7) / King Soopers (1)
(10)  Toys “R” Us (7) / Babies “R” Us (15) / Toys-Babies Combo (5)
(11)  Stop & Shop (4) / Martin’s (3) / Others (2)
(12)  Sears (5) / Kmart (9)
 

 

13


DDR Corp.

Top 50 Assets by ABR at DDR Share

$, GLA in thousands

 

                    Base Rent     Total GLA  
    

Asset

  

Location

   MSA    Pro Rata      % of Pro Rata     Pro Rata      % of Pro Rata  

1

   Plaza Del Sol    Bayamon, PR    San Juan    $ 16,735         2.2     684         0.7

2

   Shoppers World    Framingham, MA    Boston      16,239         2.1     783         0.9

3

   Plaza Rio Hondo    Bayamon, PR    San Juan      13,371         1.7     555         0.6

4

   Winter Garden Village    Winter Garden, FL    Orlando      13,276         1.7     1,121         1.2

5

   Plaza Del Norte    Hatillo, PR    San Juan      12,228         1.6     682         0.7

6

   Ahwatukee Foothills    Phoenix, AZ    Phoenix      10,303         1.3     694         0.8

7

   Wrangleboro Consumer Square    Mays Landing, NJ    Atlantic City      10,292         1.3     842         0.9

8

   Riverdale Village    Coon Rapids, MN    Minneapolis      10,107         1.3     950         1.0

9

   Tucson Spectrum    Tucson, AZ    Tucson      9,724         1.3     966         1.1

10

   Nassau Park Pavilion    Princeton, NJ    Trenton      9,598         1.3     1,106         1.2

11

   Hamilton Marketplace    Hamilton, NJ    Trenton      9,351         1.2     960         1.0

12

   Woodfield Village Green    Schaumburg, IL    Chicago      8,631         1.1     687         0.7

13

   Carolina Pavilion    Charlotte, NC    Charlotte      8,597         1.1     844         0.9

14

   Great Northern Plaza    North Olmsted, OH    Cleveland      8,335         1.1     669         0.7

15

   Plaza Escorial    Carolina, PR    San Juan      8,326         1.1     636         0.7

16

   The Shops at Midtown Miami    Miami, FL    Miami      8,249         1.1     467         0.5

17

   Plaza Palma Real    Humacao, PR    San Juan      7,765         1.0     449         0.5

18

   Polaris Towne Center    Columbus, OH    Columbus      7,520         1.0     725         0.8

19

   Connecticut Commons    Plainville, CT    Hartford      6,965         0.9     562         0.6

20

   Centennial Promenade    Centennial, CO    Denver      6,746         0.9     827         0.9

21

   Easton Market    Columbus, OH    Columbus      6,275         0.8     502         0.5

22

   Paseo Colorado    Pasadena, CA    Los Angeles      6,247         0.8     546         0.6

23

   Hamilton Commons    Mays Landing, NJ    Atlantic City      6,161         0.8     397         0.4

24

   Falcon Ridge Town Center    Fontana, CA    Los Angeles      5,973         0.8     423         0.5

25

   Crossroads Center    Gulfport, MS    Gulfport      5,934         0.8     555         0.6

26

   Silver Springs Square    Mechanicsburg, PA    Harrisburg      5,877         0.8     569         0.6

27

   Belden Park Crossings    North Canton, OH    Cleveland      5,832         0.8     593         0.6

28

   Aspen Grove    Littleton, CO    Denver      5,749         0.8     272         0.3

29

   Sycamore Crossing    Cincinnati, OH    Cincinnati      5,749         0.8     392         0.4

30

   Ridge at Creekside    Roseville, CA    Sacramento      5,692         0.7     275         0.3

31

   The Fountains    Plantation, FL    Miami      5,651         0.7     489         0.5

32

   Cotswold Village    Charlotte, NC    Charlotte      5,584         0.7     261         0.3

33

   Perimeter Pointe    Atlanta, GA    Atlanta      5,532         0.7     352         0.4

34

   The Maxwell    Chicago, IL    Chicago      5,481         0.7     240         0.3

35

   Peach Street Square    Erie, PA    Erie      5,459         0.7     717         0.8

36

   Bandera Pointe    San Antonio, TX    San Antonio      5,437         0.7     890         1.0

37

   Big Flats Consumer Square    Big Flats, NY    Elmira      5,333         0.7     574         0.6

38

   Merriam Village    Merriam, KS    Kansas City      5,257         0.7     890         1.0

39

   Independence Commons    Independence, MO    Kansas City      5,151         0.7     403         0.4

40

   Beaver Creek Crossings    Apex, NC    Raleigh      5,090         0.7     321         0.4

41

   Homestead Pavilion    Homestead, FL    Miami      5,078         0.7     397         0.4

42

   Mohawk Commons    Niskayuna, NY    Albany      5,021         0.7     530         0.6

43

   Fairfax Towne Center    Fairfax, VA    Balt-Wash DC      4,926         0.6     253         0.3

44

   Gateway Center    Everett, MA    Boston      4,890         0.6     640         0.7

45

   Arrowhead Crossing    Phoenix, AZ    Phoenix      4,875         0.6     407         0.4

46

   Willowbrook Plaza    Houston, TX    Houston      4,843         0.6     393         0.4

47

   Village at Stone Oak    San Antonio, TX    San Antonio      4,828         0.6     211         0.2

48

   Cumming Town Center    Cumming, GA    Atlanta      4,793         0.6     311         0.3

49

   Meridian Crossroads    Meridian, ID    Boise      4,754         0.6     732         0.8

50

   Brookside Marketplace    Tinley Park, IL    Chicago      4,681         0.6     602         0.7
           

 

 

    

 

 

   

 

 

    

 

 

 
   Top 50 Total          $ 364,511         47.7     29,346         32.0
   Total Portfolio          $ 764,089         100.0     91,679         100.0

 

14


DDR Corp.

Transactions

$ in millions, GLA in thousands

 

                Total                     
          DDR     Owned      At 100%      At DDR Share       
          Own. %     GLA      Price      Debt      Price      Debt     

Anchors

Acquisitions

                   

03/15

   Los Angeles, CA      100     208       $ 49.2       $ 0.0       $ 49.2       $ 0.0       Kohl’s, Michaels, PetSmart

04/15

   Wilmington, NC      100     6         3.3         0.0         3.3         0.0      

04/15

   Orlando, FL      100     186         33.3         0.0         33.3         0.0       Bed Bath & Beyond, T.J. Maxx, Ross Dress For Less

06/15

   Houston, TX      100     385         74.3         0.0         74.3         0.0       AMC Theaters, Bed Bath & Beyond
       

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    
   Total Year to Date        785       $ 160.1       $ 0.0       $ 160.1       $ 0.0      
       

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    
                      

Dispositions

                   

01/15

   Morgantown, WV      100     122         13.9         0.0         13.9         0.0       Michaels, Shop ‘N Save

02/15

   Camden, SC      100     179         11.4         0.0         11.4         0.0       Belk

03/15

   Charlotte, NC      100     70         11.8         0.0         11.8         0.0       Bi-Lo

03/15

   Bedford, IN      100     223         6.8         0.0         6.8         0.0       Goody’s, JCPenney

03/15

   Ashtabula, OH      100     58         0.6         0.0         0.6         0.0       -

03/15

   Fayetteville, NC      100     226         26.2         0.0         26.2         0.0       Bed Bath & Beyond, T.J. Maxx

03/15

   Northville, MI      5     16         4.3         0.0         0.2         0.0       -

03/15

   Apex, NC      100     36         5.5         0.0         5.5         0.0       hhgregg

03/15

   San Diego, CA      100     80         18.2         0.0         18.2         0.0       Regal

03/15

   Frisco, TX      100     108         9.0         0.0         9.0         0.0       Kohl’s

03/15

   Phoenix, AZ      20     851         106.0         64.6         21.2         12.9       Target, Walmart, Costco, JCPenney

03/15

   Kirkland, WA      20     291         36.0         27.5         7.2         5.5       24 Hour Fitness, My Home Furniture

03/15

   SM Portfolio (16 assets)      20     835         33.0         28.0         6.6         5.6       Various

03/15

   Benton Harbor, MI      20     280         21.0         18.1         4.2         3.6       Dunham’s, T.J. Maxx, PetSmart, Michaels

03/15

   Orange County, CA      20     741         99.0         73.0         19.8         14.6       Krikorian Premiere Theatres, T.J. Maxx

03/15

   Bloomfield Hills, MI      20     0         0.0         0.0         0.0         0.0       -
       

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    
   1Q Total        4,116       $ 402.7       $ 211.2       $ 162.6       $ 42.2      
                      

04/15

   Middletown, RI      100     99         16.8         0.0         16.8         0.0       Barnes & Noble, Michaels, Sports Authority

04/15

   Columbus, GA      100     117         20.2         0.0         20.2         0.0       Michaels, PetSmart, The Fresh Market

05/15

   Napa, CA      5     76         26.9         20.0         1.4         1.0       Kohl’s

05/15

   Clarence, NY      100     93         9.3         0.0         9.3         0.0       Big Lots, Jo-Ann, OfficeMax

05/15

   Homosassa, FL      5     53         13.2         0.0         0.7         0.0       Publix

06/15

   Macon, GA      100     82         7.9         0.0         7.9         0.0       hhgregg, PetSmart

06/15

   Cleveland, OH      5     48         3.8         3.2         0.2         0.2       Toys “R” Us/Babies “R” Us

2Q

   Land Sales        0.0         3.7         0.0         3.7         0.0      
       

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    
   2Q Total        568       $ 101.8       $ 23.2       $ 60.2       $ 1.2      
       

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    
   Total Year to Date        4,684       $ 504.5       $ 234.4       $ 222.8       $ 43.4      
       

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

15


DDR Corp.

Developments/Redevelopments

$ in millions, GLA in thousands

 

    Owned
SF
    Est.
Total Net
Cost
    Cost
Incurred
To Date
    Est.
Remain
Costs
    Placed
In Service
    CIP (a)     Est.
Anchor
Opening
  Est.
Stabilized
Quarter
   

Key Tenants

Consolidated Summary

                 

Developments in Progress

    $ 308      $ 249      $ 59      $ 121      $ 128         

Redevelopments - Major

      217        56        161        14        42         

Redevelopments - Minor

      203        89        114        48        41         

Retenanting

      38        20        18        10        10         

CIP and Land (b)

      N/A        90        0        0        90         
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

       
    $ 766      $ 504      $ 352      $ 193      $ 311         
                 

Developments in Progress

                 

Orlando, FL

    208      $ 62      $ 40      $ 22      $ 0      $ 40      2Q16     2Q16      Epic Theater, Five Below, Petco, HomeGoods, Michaels, Ulta, Ross Dress for Less

New Haven, CT

    132        68        46        22        0        46      4Q15     4Q16      Fresh Market, Michaels, Ulta, Bed Bath & Beyond, DSW

Other Developments

(primarily placed in service)

    0        178        163        15        121        42      N/A     N/A      -
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

       
    340      $ 308      $ 249      $ 59      $ 121      $ 128         
                 

Redevelopments - Major

                 

Pasadena, CA

    $ 92      $ 10      $ 82      $ 0      $ 10      N/A     2Q18      Hyatt Place, H&M, West Elm, Victoria’s Secret, Chico’s

Long Beach, CA

      67        34        33        9        25      N/A     2Q16      Restoration Hardware, H&M, Forever 21, Nike, Converse, Gap Factory

Cincinnati, OH

      30        2        28        0        2      N/A     2Q17      Dick’s Sporting Goods, Staples

Richmond, VA

      17        10        7        5        5      N/A     3Q17      Martin’s, Petco

San Juan, PR (Del Sol)

      11        0        11        0        0      N/A     1Q17      Dave & Busters
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

       
    $ 217      $ 56      $ 161      $ 14      $ 42         

 

(a) This balance is in addition to DDR’s pro rata share of joint venture CIP of $6.1 million.
(b) This balance is in addition to owned land adjacent to existing centers that has an estimated value of $26.5 million.

 

16


DDR Corp.

Unconsolidated Joint Ventures

$, GLA in millions

 

    

Partner

   DDR
Own %
   Operating
Properties
   Owned
GLA
   ABR    Gross
Book
Value
   Debt

BRE DDR Retail

   Blackstone Real              5%(1)           66          11.2        $ 142.4        $ 1,691.4        $ 1,219.3  

Holdings III

   Estate Partners VII                              

DDRTC Core

   TIAA-CREF            15%                26          8.4          105.4          1,554.1          815.0  

Retail Fund

                                

DDR Domestic

   Various            20%                56          7.9          88.4          1,382.7          920.4  

Retail Fund I

                                

DDR-SAU

   State of Utah            20%                23          2.1          22.3          282.1          153.5  

Retail Fund

                                

Other

   Various        Various             13          2.0          20.3          241.5          139.1  
            

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

Total

               184          31.6        $ 378.8        $ 5,151.8        $ 3,247.3  

 

(1) In addition to DDR’s 5% common equity, DDR has $309.2 million of Preferred Equity with an interest rate of 8.5%.

 

17


DDR Corp.

Joint Venture Income Statement

$ in millions

 

     At 100%     At DDR Share  
     6M15     2Q15     2Q15  

Revenues:

      

Minimum rents (1)

   $ 202.2      $ 98.4      $ 14.3   

Percentage rent

     0.9        0.4        0.1   

Recoveries

     61.5        30.6        4.5   

Other revenues

     6.1        3.7        1.1   
  

 

 

   

 

 

   

 

 

 
     270.7        133.1        20.0   

Expenses:

      

Operating and maintenance

     63.7        30.9        4.2   

Real estate taxes

     35.7        17.5        2.7   
  

 

 

   

 

 

   

 

 

 
     99.4        48.4        6.9   

Net operating income

     171.3        84.7        13.1   

Other income (expense):

      

Interest expense (2)

     (74.5     (33.6     (5.6

Depreciation and amortization

     (108.2     (51.5     (6.1

Impairment charges

     (0.4     0.0        0.0   

Other expense, net

     (0.6     (0.2     0.0   
  

 

 

   

 

 

   

 

 

 
     (183.7     (85.3     (11.7

(Loss) income from continuing operations

     (12.4     (0.6     1.4   

Loss on disposition of real estate, net

     (1.6     (1.4     (0.1
  

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to unconsolidated joint ventures

     (14.0     (2.0     1.3   

Depreciation and amortization of real estate investments

     108.2        51.5        6.1   

Impairment of depreciable real estate

     0.4        0.0        0.0   

Loss on disposition of depreciable real estate, net

     1.6        1.4        0.1   
  

 

 

   

 

 

   

 

 

 

Funds From Operations:

   $ 96.2      $ 50.9      $ 7.5   

Net income at DDR ownership interests

   $ 1.1      $ 1.3      $ 1.3   

Basis differences

     0.6        0.3        0.3   
  

 

 

   

 

 

   

 

 

 

Equity in net income of joint ventures

     1.7        1.6        1.6   

FFO at DDR’s ownership interests

   $ 14.5      $ 7.5     

Operating FFO at DDR’s ownership interests

   $ 14.5      $ 7.5     

(1)    Straight-line rent, net

     2.0        1.0        0.0   

(2)    Non-cash interest expense

     (1.6     (0.8     0.0   

 

18


DDR Corp.

Joint Venture Balance Sheet

$ in millions

 

     At 100%  
     2Q15     4Q14  

Land

   $ 1,346.8      $ 1,439.8   

Buildings

     3,566.0        3,854.6   

Fixtures and tenant improvements

     184.7        200.7   
  

 

 

   

 

 

 
     5,097.5        5,495.1   

Less: Accumulated depreciation

     (770.1     (773.2
  

 

 

   

 

 

 
     4,327.4        4,721.9   

Land held for development and construction in progress

     54.2        55.7   
  

 

 

   

 

 

 

Real estate, net

     4,381.6        4,777.6   
  

 

 

   

 

 

 

Cash and restricted cash

     80.2        100.8   

Receivables, including straight-line rent, net

     48.8        80.5   

Other assets, net

     346.7        394.7   
  

 

 

   

 

 

 
     4,857.3        5,353.6   

Mortgage debt

     3,247.3        3,552.8   

Notes and accrued interest payable to DDR

     3.0        144.8   

Other liabilities

     206.0        277.0   
  

 

 

   

 

 

 
     3,456.3        3,974.6   

Redeemable preferred equity

     309.2        305.3   

Accumulated equity

     1,091.8        1,073.7   
  

 

 

   

 

 

 
   $ 4,857.3      $ 5,353.6   
     At DDR Share  
     2Q15     4Q14  

Land

   $ 186.9      $ 202.5   

Buildings

     501.5        555.5   

Fixtures and tenant improvements

     29.9        33.3   
  

 

 

   

 

 

 
     718.3        791.3   

Less: Accumulated depreciation

     (145.6     (150.2
  

 

 

   

 

 

 
     572.7        641.1   

Land held for development and construction in progress

     6.1        5.8   
  

 

 

   

 

 

 

Real estate, net

     578.8        646.9   
  

 

 

   

 

 

 

Cash and restricted cash

     10.2        16.8   

Receivables, including straight-line rent, net

     7.7        15.4   

Other assets, net (1)

     24.6        27.7   

Disproportionate share of equity (2)

     (2.2     (2.2
  

 

 

   

 

 

 
     619.1        704.6   

Mortgage debt (3) (4)

     452.1        503.5   

Notes and accrued interest payable to DDR

     0.6        14.7   

Other liabilities

     18.9        29.2   
  

 

 

   

 

 

 
     471.6        547.4   

Accumulated equity

     134.3        144.1   

Disproportionate share of equity (2)

     13.2        13.1   
  

 

 

   

 

 

 
   $ 619.1      $ 704.6   

(1)    Intangible assets at DDR share

     18.0        20.4   

(2)    Adjustments represent promoted equity and minority interests

    

(3)    Fair market value of debt adjustment at DDR share (ASC 820)

     0.9        1.0   

(4)    Non-recourse mortgage debt with a zero basis at DDR share

     0.0        17.4   

 

19


DDR Corp.

Capital Structure

$, shares and units in millions, except per share

 

     June 30, 2015     June 30, 2014  

Capital Structure

   Amount     % of Total     Amount     % of Total  

Common Shares Equity

   $ 5,605.0        50   $ 6,365.6        53

Perpetual Preferred Stock

     350.0        3     350.0        3

Unsecured Credit Facilities

     241.5        2     28.6        0

Unsecured Term Loan

     300.0        3     350.0        3

Unsecured Public Debt

     3,119.5        28     2,775.6        23

Secured Term Loan

     200.0        2     400.0        3

Fixed Rate Mortgage Debt

     1,287.2        11     1,674.5        14

Variable Rate Mortgage Debt

     98.6        1     85.3        1
  

 

 

   

 

 

   

 

 

   

 

 

 
     5,246.8        47     5,314.0        44
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 11,201.8        100   $ 12,029.6        100

Capital Structure Detail

        

Debt to Market Capitalization

     46.8       44.2  

Common Shares Outstanding

     361.1          359.6     

Operating Partnership Units

     1.4          1.4     

Market Value per Share

   $ 15.46        $ 17.63     

Accretion on Convertible Notes (excluded above)

   $ 4.0        $ 15.7     

Partners’ Share of Consolidated Debt (included above)

   $ 9.9        $ 9.9     

DDR Share of Unconsolidated Debt (excluded above)

   $ 452.1        $ 494.3     

 

Credit Ratings

            

Covenants

               
     Debt Rating    Outlook           Covenant
Threshold
     Actual
Covenant
 

Moody’s

   Baa2    Stable    Total Debt to Real Estate Assets Ratio      £ 65      50

S&P

   BBB-    Stable    Secured Debt to Assets Ratio      £ 40      14

Fitch

   BBB-    Stable    Unencumbered Assets to Unsecured Debt      ³ 135      197
         Fixed Charge Coverage Ratio      ³  1.5x         2.2

 

20


DDR Corp.

Debt/EBITDA

$ in millions

 

     2Q15     2Q14  

Consolidated

    

Net income to DDR

   $ 18.6      $ 76.0   

Impairments

     0.0        14.3   

Depreciation and amortization

     99.3        95.2   

Interest expense

     61.3        59.6   

Loss (gain) on change in control of interests

     6.5        (83.8

Other (income) expense, net

     (0.2     4.5   

Equity in net income of JVs

     (1.6     (1.1

Income tax expense

     0.6        0.6   

EBITDA adjustments from discontinued operations

     0.0        1.3   

Gain on disposition of real estate, net

     (11.3     (1.5

Adjustments for non-controlling interests

     (0.2     0.3   

JV FFO (at DDR share)

     7.5        7.4   

Other JV adjustments (at DDR share)

     0.0        (0.2
  

 

 

   

 

 

 

EBITDA - current quarter

     180.5        172.6   

EBITDA - annualized

     722.0        690.4   

Consolidated debt

     5,260.2        5,328.9   

Partner share of consolidated debt

     (9.9     (9.9

Face value adjustments

     (13.5     (14.9

Cash and restricted cash

     (36.3     (389.4
  

 

 

   

 

 

 

Net adjusted debt

   $ 5,200.5      $ 4,914.7   

Debt/EBITDA - Consolidated

     7.20x        7.12x   

Pro rata including JVs

    

EBITDA - current quarter

     186.2        181.4   

EBITDA - annualized

     744.8        725.6   

Consolidated net debt

     5,200.5        4,914.7   

JV debt (at DDR share)

     451.2        493.8   

Cash and restricted cash

     (10.2     (17.2
  

 

 

   

 

 

 

Net adjusted debt

   $ 5,641.5      $ 5,391.3   

Debt/EBITDA - Pro rata

     7.57x        7.43x   

 

21


DDR Corp.

Debt Summary

$ in millions

 

          Consolidated     Unconsolidated  
          Total
100%
     Total
DDR Share
    Interest
Rate
DDR Share
    Total 100%     Total
DDR Share
    Interest Rate
DDR Share
 

Debt Composition

                

Unsecured Credit Facilities

    $ 241.5       $ 241.5        1.21      

Unsecured Term Loan

      300.0         300.0        1.29      

Unsecured Public Debt

      3,115.5         3,115.5        4.98      

Secured Term Loan

      200.0         200.0        1.54      

Fixed Rate Mortgage Loans

      1,287.2         1,277.3        5.16   $ 2,061.8      $ 351.5        5.34

Variable Rate Mortgage Loans

      98.6         98.6        1.42     1,167.4        99.7        1.92
   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

      5,242.8         5,232.9        4.44     3,229.2        451.2        4.58

Fair Market Value Adjustment

      17.4         17.4            18.1        0.9     
   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    $ 5,260.2       $ 5,250.3        4.44   $ 3,247.3      $ 452.1        4.58
    Scheduled
Principal
Payments
    Secured
Debt
Maturities
     Unsecured
Debt
Maturities
    Total 100%     Total
Pro Rata
    Cash Interest
Rate
Pro Rata
    GAAP Interest
Rate
Pro Rata
 

Consolidated Maturity Schedule (1)

              

2015

  $ 17.3      $ 174.3       $ 350.0      $ 541.6      $ 541.6        3.23     4.50

2016

    30.7        117.3         240.0        388.0        388.0        7.74     7.49

2017

    29.8        173.4         300.0        503.2        503.2        6.58     5.83

2018

    22.7        158.2         582.2        763.1        763.1        4.16     4.07

2019

    16.5        169.3         0.0        185.8        185.8        5.33     5.25

2020

    7.3        280.2         841.5        1,129.0        1,129.0        3.83     3.75

2021

    4.4        126.5         300.0        430.9        430.9        3.92     3.82

2022

    0.1        42.8         450.0        492.9        483.0        4.67     4.67

2023

    0.0        0.0         300.0        300.0        300.0        3.38     3.38

2024 and beyond

    0.0        15.0         500.0        515.0        515.0        3.53     3.53

Unsecured debt discount

         (6.7     (6.7     (6.7    
 

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $ 128.8      $ 1,257.0       $ 3,857.0      $ 5,242.8      $ 5,232.9        4.44     4.44

Unconsolidated Maturity Schedule (1)

              

2015

  $ 4.1      $ 0.0       $ 0.0      $ 4.1      $ 3.1        0.00     0.00

2016

    7.8        4.6         0.0        12.4        2.1        5.99     5.99

2017

    7.3        1,358.2         0.0        1,365.5        280.5        5.46     5.46

2018

    4.0        124.0         0.0        128.0        19.6        4.46     4.34

2019

    4.0        784.0         0.0        788.0        40.3        2.11     1.82

2020

    4.2        442.8         0.0        447.0        65.1        2.23     2.18

2021

    3.4        80.5         0.0        83.9        31.6        5.41     5.41

2022

    1.7        244.1         0.0        245.8        12.4        4.39     3.38

2023

    1.7        80.7         0.0        82.4        4.3        3.93     4.32

2024 and beyond

    0.5        71.6         0.0        72.1        10.8        4.30     4.30
 

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 38.7      $ 3,190.5       $ 0.0      $ 3,229.2      $ 469.8        4.58     4.52

% of Total

  Consolidated                        Unconsolidated              

Fixed

    84.0            63.8    

Variable

    16.0            36.2    

Recourse to DDR

    74.4            0.0    

Non-recourse to DDR

    25.6            100.0    

 

(1) Assumes borrower extension options are exercised.

 

22


DDR Corp.

Consolidated Debt Detail

$ in millions

 

     Balance
100%
     Balance
DDR Share
     Maturity
Date (1)
     Cash Interest
Rate (2) (3)
 

Senior Debt

           

Unsecured Revolver ($750m)

   $ 241.5       $ 241.5         06/20         L + 100   

Unsecured Revolver ($50m)

     0.0         0.0         06/20         L + 100   

Secured Term Loan ($200m)

     200.0         200.0         04/18         L + 135   

Unsecured Term Loan ($400m)

     300.0         300.0         04/20         L + 110   
  

 

 

    

 

 

       
   $ 741.5       $ 741.5         

Public Debt

           

Convertible Notes (4)

   $ 346.0       $ 346.0         11/15         1.75

Unsecured Notes

     239.9         239.9         03/16         9.63

Unsecured Notes

     300.0         300.0         04/17         7.50

Unsecured Notes

     299.2         299.2         04/18         4.75

Unsecured Notes

     82.2         82.2         07/18         7.50

Unsecured Notes

     298.7         298.7         09/20         7.88

Unsecured Notes

     298.4         298.4         01/21         3.50

Unsecured Notes

     456.1         456.1         07/22         4.63

Unsecured Notes

     298.5         298.5         05/23         3.38

Unsecured Notes

     496.5         496.5         02/25         3.63
  

 

 

    

 

 

       
   $ 3,115.5       $ 3,115.5         

Mortgage Debt

           

Hamilton Commons, NJ

   $ 0.5       $ 0.5         09/15         4.70

Winter Garden Village, FL

     103.1         103.1         10/15         6.10

Cumming Town Center, GA

     33.4         33.4         10/15         6.10

Silver Spring Square, PA

     38.0         38.0         10/15         6.35

Tops Plaza, NY

     1.1         1.1         01/16         8.00

Freedom Plaza, NY

     0.5         0.5         09/16         7.85

Sycamore Crossing, OH

     63.0         63.0         12/16         5.81

The Maxwell, IL

     55.5         55.5         12/16         L + 160   

Falcon Ridge Town Center, CA

     43.5         43.5         01/17         5.68

Vista Village, CA

     33.2         33.2         04/17         5.71

Walmart Supercenter, NC

     2.9         2.9         08/17         6.00

Connecticut Commons, CT

     47.0         47.0         10/17         5.01

Riverdale Village, MN

     25.8         25.8         10/17         5.01

Riverdale Village Perimeter, MN

     32.3         32.3         10/17         5.01

Lake Brandon Village, FL

     9.3         9.3         10/17         5.01

Shoppers World Brookfield, WI

     5.8         5.8         10/17         5.01

Marketplace of Brown Deer, WI

     4.1         4.1         10/17         5.01

Brown Deer Center, WI

     7.8         7.8         10/17         5.01

Thruway Plaza (Walmart), NY

     1.3         1.3         10/17         6.78

Tops Plaza, NY

     5.6         5.6         01/18         7.05

Falcon Ridge Town Center, CA

     14.6         14.6         01/18         5.91

Walmart Supercenter, SC

     3.0         3.0         01/18         6.00

Fortuna Center, VA

     12.1         12.1         02/18         6.18

 

23


DDR Corp.

Consolidated Debt Detail

$ in millions

 

     Balance
100%
     Balance
DDR Share
     Maturity
Date (1)
     Cash Interest
Rate (2) (3)
 

Johns Creek Town Center, GA

     24.2         24.2         03/18         5.06

Southland Crossings, OH

     24.2         24.2         03/18         5.06

The Promenade at Brentwood, MO

     30.8         30.8         03/18         5.06

DDR Headquarters, OH

     28.1         28.1         03/18         L + 105   

Mohawk Commons, NY

     8.7         8.7         12/18         5.75

Lowe’s, TN

     3.7         3.7         01/19         7.66

Nassau Park Pavilion, NJ

     56.6         56.6         02/19         3.40

Bandera Pointe, TX

     24.6         24.6         02/19         3.40

Presidential Commons, GA

     21.1         21.1         02/19         3.40

Plaza Cayey, PR

     20.8         20.8         06/19         7.59

Plaza Fajardo, PR

     25.0         25.0         06/19         7.59

Plaza Isabela, PR

     21.9         21.9         06/19         7.59

Plaza Walmart, PR

     11.7         11.7         06/19         7.59

Mariner Square, FL

     2.4         2.4         09/19         9.75

Northland Square, IA

     4.7         4.7         01/20         9.38

Plaza Rio Hondo, PR

     124.8         124.8         01/20         3.95

Easton Marketplace, OH

     49.8         49.8         01/20         3.95

The Fountains, FL

     45.5         45.5         01/20         3.95

Perimeter Pointe, GA

     43.0         43.0         01/20         3.95

Polaris Towne Center, OH

     43.3         43.3         04/20         6.76

Chapel Hills West, CO

     12.3         12.3         06/21         5.49

West Valley Marketplace, PA

     9.4         9.4         07/21         6.95

Plaza Escorial, PR

     73.3         73.3         07/21         3.59

Wrangleboro Consumer Sq, NJ

     60.0         60.0         10/21         5.41

Chapel Hills East, CO

     8.4         8.4         12/21         5.24

Paradise Village Gateway, AZ

     30.0         20.1         01/22         4.65

Macedonia Commons, OH

     19.1         19.1         02/22         5.71

Gulfport Promenade, MS

     15.0         15.0         12/37         S + 37   
  

 

 

    

 

 

       
   $ 1,385.8       $ 1,375.9         

FMV adjustment - assumed debt

     17.4         17.4         
  

 

 

    

 

 

       

Total

   $ 1,403.2       $ 1,393.3         

Rate Type

           

Fixed

   $ 4,402.7       $ 4,392.8         4.5 years         5.03

Variable

     840.1         840.1         4.4 years         1.34
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 5,242.8       $ 5,232.9         4.5 years         4.44

 

24


DDR Corp.

Consolidated Debt Detail

 

$ in millions    Balance
100%
     Balance
DDR Share
     Maturity
Date (1)
    Cash Interest
Rate (2) (3)
 

Perpetual Preferred Stock

          

Class J

   $ 200.0       $ 200.0         Perpetual        6.500

Class K

     150.0         150.0         Perpetual        6.250

Interest Rate Swaps

     Notional         Rate         Fixed        Termination   

Underlying Debt Hedged:

     Amount         Hedged         Rate        Date   

Mortgage Portfolio

   $ 79.2         1 mo. LIBOR         2.81     9/1/17   

 

(1) Assumes borrower extension options are exercised.

 

(2) L = LIBOR, S = SIFMA.

 

(3) Does not include discounts or premiums.

 

(4) The $350 million face value of the convertible notes is to be settled in cash. Any premium may be net settled prior to November 2015 with DDR’s common stock or cash at DDR’s option once the stock price rises above 125% of the $14.59 conversion price (as of June 30, 2015) for a specified period of time as outlined in the Prospectus Supplement dated November 1, 2010. The conversion price is subject to future adjustments, including the declaration of a quarterly dividend. No dilution assumed for purposes of calculating FFO or Operating FFO as of June 30, 2015, since the market trigger has not been achieved and the notes were not convertible. Included in this amount is a $4.0 million reduction as compared to the face value of the convertible notes representing the remaining accretion of the initial conversion valuation.

 

25


DDR Corp.

Unconsolidated Debt Detail

$ in millions

 

     Balance
100%
     Balance
DDR Share
     Maturity
Date (1)
     Cash Interest
Rate (2) (3)
 

BRE DDR Retail Holdings III

           

Telegraph Plaza, MI

   $ 4.8       $ 0.2         12/16         5.99

Camp Creek, GA

     42.0         2.1         12/18         4.62

May 2019 Loan Pool (2 assets)

     20.7         1.0         05/19         4.85

November 2019 Loan Pool (42 assets)

     764.5         38.2         11/19         L + 185   

Whittwood Town Center, CA

     43.0         2.2         12/20         5.20

January 2022 Loan Pool (3 assets)

     23.0         1.1         01/22         4.75

Kyle Marketplace, TX

     24.8         1.2         03/22         4.09

March 2022 Loan Pool (3 assets)

     23.4         1.2         03/22         5.49

Eastland Center, CA

     90.0         4.5         07/22         4.50

Greenway Commons, TX

     33.0         1.7         07/22         4.10

July 2022 Loan Pool (4 assets)

     17.0         0.9         07/22         4.40

White Oak Village, VA

     34.3         1.7         09/22         3.60

January 2023 Loan Pool (4 assets)

     22.7         1.1         01/23         4.27

Kingsbury Center, IL

     14.5         0.7         06/23         3.97

Valley Bend, AL

     43.5         2.2         06/23         3.75
  

 

 

    

 

 

       
   $ 1,201.2       $ 60.0         

DDR Domestic Retail Fund I

           

Village Center, WI

   $ 10.7       $ 2.1         02/17         L + 140   

West Falls Plaza, NJ

     9.9         2.0         02/17         L + 140   

52 Additional Assets

     883.5         176.7         07/17         5.60

Heather Island, FL

     4.5         0.9         02/18         3.56

Hilliard Rome, OH

     11.8         2.4         02/18         3.56
  

 

 

    

 

 

       
   $ 920.4       $ 184.1         

DDRTC Core Retail Fund

           

Pool 1 (9 assets)

   $ 350.2       $ 52.5         03/17         5.45

Pool 5 (11 assets) (3)

     217.0         32.6         07/20         L + 150   

Pool 3 (6 assets) (3)

     165.3         24.8         07/20         L + 175   

Birkdale Village, NC

     82.5         12.4         04/24         4.30
  

 

 

    

 

 

       
   $ 815.0       $ 122.3         

DDR-SAU Retail Fund

           

DDR-SAU Retail Fund (14 assets)

   $ 83.3       $ 16.7         09/17         4.74

DDR-SAU Retail Fund (9 assets)

     70.2         14.0         04/18         4.65
  

 

 

    

 

 

       
   $ 153.5       $ 30.7         

Other Joint Ventures

           

Lennox Town Center Limited, OH

   $ 1.0       $ 0.5         07/17         6.44

Lennox Town Center Limited, OH

     26.0         13.0         07/17         5.64

RO & SW Realty (9 assets)

     19.3         4.9         10/20         5.25

Sun Center Limited, OH

     22.1         17.6         05/21         5.99

RVIP IIIB, Deer Park, IL

     70.7         18.1         09/21         4.84
  

 

 

    

 

 

       
   $ 139.1       $ 54.1         

 

26


DDR Corp.

Unconsolidated Debt Detail

$ in millions

 

     Balance
100%
     Balance
DDR Share
     Maturity
Date (1)
    Cash Interest
Rate (2) (3)
 

Subtotal

   $ 3,229.2       $ 451.2        

FMV Adjustment - Assumed Debt

     18.1         0.9        
  

 

 

    

 

 

      

Total

   $ 3,247.3       $ 452.1        

Rate Type

          

Fixed

   $ 2,061.8       $ 351.5         3.0 years        5.34

Variable

     1,167.4         99.7         4.6 years        1.92
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 3,229.2       $ 451.2         3.3 years        4.58

Interest Rate Swaps

     Notional         Rate         Fixed        Termination   

Underlying Debt Hedged:

     Amount         Hedged         Rate        Date   

Mortgage Loan

   $ 42.0         1 mo. LIBOR         1.87     12/1/18   

 

(1) Assumes borrower extension options are exercised.

 

(2) L = LIBOR

 

(3)    Loans with floor interest rates:

   Floor:

         DDRTC Holdings Pool 5 (11 assets)

   1 mo. LIBOR of 0.25%

         DDRTC Holdings Pool 3 (6 assets)

   1 mo. LIBOR of 0.25%

 

27


DDR Corp.

Analyst Coverage

 

Corporate Headquarters

      Investor Relations   

DDR Corp.

      Matt Lougee   

3300 Enterprise Parkway

      Toll Free: (877) 225-5337   

Beachwood, Ohio 44122

      Main: (216) 755-5500   

Website: www.ddr.com

      Email: mlougee@ddr.com   

Equity Research

        

Bank of America Merrill Lynch

   Craig Schmidt    craig.schmidt@baml.com      (646 ) 855-3640 

Canaccord Genuity

   Paul Morgan    pmorgan@canaccordgenuity.com      (415 ) 229-7181 

Capital One

   Chris Lucas    christopher.lucas@capitalone.com      (571 ) 633-8151 

Citigroup

   Michael Bilerman    michael.bilerman@citi.com      (212 ) 816-1383 
   Christy McElroy    christy.mcelroy@citi.com      (212 ) 816-6981 

Cowen & Company

   Jim Sullivan    james.sullivan@cowen.com      (646 ) 562-1380 

Credit Suisse

   Ian Weissman    ian.weissman@credit-suisse.com      (212 ) 538-6889 
   George Auerbach    george.auerbach@credit-suisse.com      (212 ) 538-8082 

Deutsche Bank

   Vincent Chao    vincent.chao@db.com      (212 ) 250-6799 

DISCERN

   Dave Wigginton    dwigginton@discern.com      (646 ) 863-4177 

Evercore ISI

   Steve Sakwa    steve.sakwa@evercoreisi.com      (212 ) 446-9462 
   Samir Khanal    samir.khanal@evercoreisi.com      (212 ) 888-3796 

Goldman Sachs

   Andrew Rosivach    andrew.rosivach@gs.com      (212 ) 902-2796 
   Caitlin Burrows    caitlin.burrows@gs.com      (212 ) 902-4736 

Green Street Advisors

   Jason White    jwhite@greenstreetadvisors.com      (949 ) 640-8780 

Hilliard Lyons

   Carol Kemple    ckemple@hilliard.com      (502 ) 588-1839 

Jefferies and Company

   Tayo Okusanya    tokusanya@jefferies.com      (212 ) 336-7076 

J.P. Morgan

   Michael Mueller    michael.w.mueller@jpmorgan.com      (212 ) 622-6689 

KeyBanc Capital Markets

   Jordan Sadler    jsadler@keybanccm.com      (917 ) 368-2280 
   Todd Thomas    tthomas@keybanccm.com      (917 ) 368-2286 

Morgan Stanley

   Haendel St. Juste    haendel.stjuste@morganstanley.com      (212 ) 761-0071 
   Catherine Klinchuch    catherine.klinchuch@morganstanley.com      (212 ) 296-8581 

RBC Capital Markets

   Rich Moore    rich.moore@rbccm.com      (440 ) 715-2646 

Sandler O’Neill

   Alex Goldfarb    agoldfarb@sandleroneill.com      (212 ) 466-7937 

SunTrust Robinson Humphrey

   Ki Bin Kim    kibin.kim@suntrust.com      (212 ) 303-4124 

UBS

   Ross Nussbaum    ross.nussbaum@ubs.com      (212 ) 713-2484 
   Jeremy Metz    jeremy.metz@ubs.com      (212 ) 713-2429 

Wells Fargo

   Jeff Donnelly    jeff.donnelly@wellsfargo.com      (617 ) 603-4262 
   Tamara Fique    tamara.fique@wellsfargo.com      (443 ) 263-6568 

Fixed Income Research

        

Barclays

   Peter Troisi    peter.troisi@barclays.com      (212 ) 412-3695 

Citigroup

   Tom Cook    thomas.n.cook@citigroup.com      (212 ) 723-1112 

J.P. Morgan

   Mark Streeter    mark.streeter@jpmorgan.com      (212 ) 834-5086 

Wells Fargo

   Thierry Perrein    thierry.perrein@wellsfargo.com      (704 ) 715-8455 

 

28


DDR Corp.

Notable Accounting and Supplemental Policies

Revenues

 

  Percentage and overage rents are recognized after the tenants’ reported sales have exceeded the applicable sales breakpoint.

 

  Tenant reimbursements are recognized in the period in which the expenses are incurred.

 

  Lease termination fees are recognized upon termination of a tenant’s lease when the Company has no further obligations under the lease.

General and Administrative Expenses

 

  General and administrative expenses include certain internal leasing salaries, legal salaries and related expenses associated with the leasing of space which are charged to operations as incurred.

 

  All internal and external acquisition costs are expensed as incurred.

 

  The Company does not capitalize any executive officer compensation.

 

  General and administrative expenses include executive property management compensation and related expenses. Property management services’ direct compensation is reflected in operating and maintenance expenses.

Deferred Financing Costs

 

  Costs incurred in obtaining financing are included in deferred charges and amortized on a straight-line basis over the term of the related debt agreement; such amortization is reflected as interest expense in the consolidated statements of operations.

Real Estate

 

  Real estate assets are stated at cost less accumulated depreciation, which, in the opinion of management, is not in excess of the individual property’s estimated undiscounted future cash flows, including estimated proceeds from disposition.

 

  Construction in progress includes shopping center developments and significant expansions and redevelopments.

 

  Acquisitions of a partner’s interest in an unconsolidated joint venture in which a change of control has occurred are recorded at fair value.

 

  Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets as follows:

 

Buildings    20 to 40 years
Building Improvements    5 to 20 years
Furniture/Fixtures/    Shorter of economic life or lease terms
    Tenant Improvements   

 

29


DDR Corp.

Notable Accounting and Supplemental Policies

Capitalization

 

  Expenditures for maintenance and repairs are charged to operations as incurred. Renovations and expenditures that improve or extend the life of the asset are capitalized.

 

  The Company capitalizes interest on funds used for the construction or expansion of shopping centers and certain construction administration costs. Capitalization of interest and administration costs ceases when construction activities are completed and the property is available for occupancy by tenants or when activities are suspended.

 

  Interest expense and real estate taxes incurred during construction are capitalized and depreciated over the building life. The Company does not capitalize interest on land held for development which is on hold and is not undergoing any development activities.

Gains on Sales of Real Estate

 

  Gains on sales of real estate generally related to the sale of outlots and land adjacent to existing shopping centers are recognized at closing when the earnings process is deemed to be complete.

 

  Effective in 2015, the operating activity and the gains or losses on the sales of operating shopping centers are generally no longer reflected as discontinued operations.

Leasing Spreads

 

  Leasing spreads are calculated by comparing the prior tenant’s annual base rent in the final year of the old lease to the new tenant’s annual base rent in the first year of the new lease. The reported calculation, “Comparable”, only includes deals executed within one year of the date that the prior tenant vacated. “Non-comp” deals consist of deals not executed within one year of the date the prior tenant vacated, deals which resulted in a significant difference in size, or deals for space which was vacant at acquisition.

Same Store NOI (“SSNOI”)

 

  Excludes development, major redevelopment, straight-line rental income and expenses, lease termination income, FMV of leases and provisions for uncollectible amounts and/or recoveries thereof; includes assets owned in comparable periods (15 months for quarter comparisons).

Net Effective Rents

 

  Net effective rents are calculated as a weighted average per rentable square foot over the lease term with full consideration for all costs associated with leasing the space rather than pro rata costs. Landlord work represents property level improvements associated with the lease transactions; however, those improvements are attributed to the landlord’s property value and typically extend the life of the asset in excess of the lease term.

 

30


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