Kite Realty Group Trust (NYSE:KRG) (“KRG”) reported today its
operating results for the third quarter ended September 30, 2019.
“As previously announced, we have
completed our Project Focus disposition program. We now have a
top-tier balance sheet to complement a high-quality portfolio
concentrated in the southern U.S.,” said John A. Kite, Chairman and
CEO. “Additionally, our operations team continued to deliver
strong results, leasing another 562,000 square feet this quarter
and raising our portfolio leased rate to 95.4%. We look
forward to a strong finish in 2019 and continued momentum into
2020.”
Financial Results
- Realized net loss attributable to common shareholders of $19.7
million, or $0.24 per common share, for the third quarter and $15.8
million, or $0.19 per common share, for the nine months ending
September 30, 2019.
- Generated Funds from Operations of the Operating Partnership as
adjusted (FFO) of $33.3 million, or $0.39 per diluted common share,
for the third quarter and $108.3 million, or $1.26 per diluted
common share, for the nine months ending September 30, 2019.
- Increased Same-Property Net Operating Income (NOI) by
2.3%. Year-to-date Same-Property NOI grew by 2.0%.
Portfolio Operations
- Annualized base rent (ABR) for the operating retail portfolio
was $17.64, an increase of $0.87 year-over-year.
- Retail leased percentage was 95.4%, an increase of 190 basis
points year-over-year.
- Small shop leased percentage was 92.0%, an increase of 110
basis points year-over-year.
- Executed 70 new and renewal leases during the third quarter,
representing a total of 562,200 square feet.
- GAAP leasing spreads of 42.4% (24.3% cash basis) on 10
comparable new leases, 9.5% (6.3% cash basis) on 44 comparable
renewals, and 12.3% (7.9% cash basis) on a blended basis.
- Executed 246 new and renewal leases for over 1.7 million square
feet through September 30, 2019.
Transaction Highlights
- Sold 8 non-core assets for a total of $213 million during the
third quarter.
- Acquired Nora Plaza, a 140,000 sf community center anchored by
Whole Foods and a non-owned Target in Indianapolis, IN for a
purchase price of $29.0 million.
- Subsequent to quarter end, sold an additional 3 non-core assets
for $31.6 million.
- Total non-core asset sales year-to-date of $502 million at a
blended cap rate of approximately 8%. The weighted average
sale date for sold assets was June 2019.
Balance SheetAs of September
30, 2019, KRG’s net-debt-to-EBITDA ratio was 6.0x. Following
the asset sales and corresponding debt paydown subsequent to
quarter end, KRG’s proforma net-debt-to-EBITDA is 5.9x. KRG
has limited debt maturing through 2021 and zero drawn on its line
of credit.
GuidanceKRG is raising 2019
same property NOI growth guidance from 1.50% - 2.50% to 2.00% -
2.50% and narrowing 2019 FFO guidance from $1.61 - $1.69 per share
to $1.63 - $1.67 per share.
|
|
2019 Earnings Guidance1 |
|
|
Low |
|
High |
Net Income Guidance |
|
$ |
(0.16 |
) |
|
$ |
(0.12 |
) |
Add: Impairment Charges |
|
0.43 |
|
|
0.43 |
|
Add: Depreciation and
Amortization |
|
1.54 |
|
|
1.54 |
|
Add: Loss on Debt
Extinguishment |
|
0.11 |
|
|
0.11 |
|
Less: Gain on Sales of
Operating Properties, net |
|
(0.29 |
) |
|
(0.29 |
) |
2019 FFO, as Adjusted,
Guidance |
|
$ |
1.63 |
|
|
$ |
1.67 |
|
|
|
Previous |
|
Current |
|
Change at Midpoint |
|
SP NOI Growth |
|
1.50% - 2.50% |
|
2.00% - 2.50% |
|
0.25% |
|
2019 Project Focus
Dispositions |
|
$415M - $500M |
|
$502M |
|
$44M |
|
2019 FFO
Guidance |
|
$1.61 - $1.69 |
|
$1.63 - $1.67 |
|
— |
|
_________ |
1 |
The Company’s 2019 guidance is based on a number of factors, many
of which are outside the Company’s control and all of which are
subject to change. The Company may change its guidance during
the year if actual or anticipated results vary from these
assumptions, although the Company undertakes no obligation to do
so. |
Earnings Conference CallKite
Realty Group Trust will conduct a conference call to discuss its
financial results on Wednesday, November 6, 2019, at 10:00 a.m.
Eastern Time. A live webcast of the conference call will be
available on KRG’s corporate website at www.kiterealty.com. The
dial-in numbers are (844) 309-0605 for domestic callers and (574)
990-9933 for international callers (passcode 8392857). In
addition, a webcast replay link will be available on the corporate
website.
About Kite Realty Group
TrustKite Realty Group Trust is a full-service, vertically
integrated real estate investment trust (REIT) that provides
communities with convenient and beneficial shopping experiences. We
connect consumers to retailers in desirable markets through our
portfolio of neighborhood, community, and lifestyle centers. Using
operational, development, and redevelopment expertise, we
continuously optimize our portfolio to maximize value and return to
our shareholders. For more information, please visit our website at
kiterealty.com.
Safe HarborCertain statements
in this document that are not historical fact may constitute
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. Such statements are based on assumptions and
expectations that may not be realized and are inherently subject to
risks, uncertainties and other factors, many of which cannot be
predicted with accuracy and some of which might not even be
anticipated. Future events and actual results, performance,
transactions or achievements, financial or otherwise, may differ
materially from the results, performance, transactions or
achievements, financial or otherwise, expressed or implied by the
forward-looking statements. Risks, uncertainties and other factors
that might cause such differences, some of which could be material,
include, but are not limited to: national and local economic,
business, real estate and other market conditions, particularly in
light of low growth in the U.S. economy as well as economic
uncertainty caused by fluctuations in the prices of oil and other
energy sources and inflationary trends or outlook; the risk that
KRG may not be able to successfully complete the planned
dispositions on favorable terms – or at all; financing risks,
including the availability of, and costs associated with, sources
of liquidity; KRG’s ability to refinance, or extend the maturity
dates of, its indebtedness; the level and volatility of interest
rates; the financial stability of tenants, including their ability
to pay rent and the risk of tenant bankruptcies; the competitive
environment in which KRG operates; acquisition, disposition,
development and joint venture risks; property ownership and
management risks; KRG’s ability to maintain its status as a real
estate investment trust for federal income tax purposes; potential
environmental and other liabilities; impairment in the value of
real estate property KRG owns; the impact of online retail
competition and the perception that such competition has on the
value of shopping center assets; risks related to the geographical
concentration of KRG’s properties in Florida, Indiana and Texas;
insurance costs and coverage; risks associated with cybersecurity
attacks and the loss of confidential information and other business
interruptions; and other factors affecting the real estate industry
generally. KRG refers you to the documents filed by KRG from time
to time with the SEC, specifically the section titled “Risk
Factors” in KRG’s and the Operating Partnership’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2018, which
discuss these and other factors that could adversely affect KRG’s
results. KRG undertakes no obligation to publicly update or revise
these forward-looking statements, whether as a result of new
information, future events or otherwise.
|
Kite Realty Group TrustConsolidated
Balance Sheets(Unaudited) |
|
($ in
thousands) |
|
|
|
|
|
|
September 30, 2019 |
|
December 31, 2018 |
Assets: |
|
|
|
|
Investment properties, at cost |
|
$ |
3,153,436 |
|
|
$ |
3,641,120 |
|
Less: accumulated depreciation |
|
(666,291 |
) |
|
(699,927 |
) |
|
|
2,487,145 |
|
|
2,941,193 |
|
|
|
|
|
|
Cash and cash equivalents |
|
40,442 |
|
|
35,376 |
|
Tenant and other receivables,
including accrued straight-line rent of $27,487 and $31,347,
respectively |
|
50,017 |
|
|
58,059 |
|
Restricted cash and escrow
deposits |
|
9,548 |
|
|
10,130 |
|
Deferred costs and
intangibles, net |
|
76,739 |
|
|
95,264 |
|
Prepaid and other assets |
|
37,121 |
|
|
12,764 |
|
Investments in unconsolidated
subsidiaries |
|
12,868 |
|
|
13,496 |
|
Assets held for sale |
|
— |
|
|
5,731 |
|
Total
Assets |
|
$ |
2,713,880 |
|
|
$ |
3,172,013 |
|
Liabilities and
Shareholders’ Equity: |
|
|
|
|
Mortgage and other
indebtedness, net |
|
$ |
1,198,584 |
|
|
$ |
1,543,301 |
|
Accounts payable and accrued
expenses |
|
77,492 |
|
|
85,934 |
|
Deferred revenue and other
liabilities |
|
89,556 |
|
|
83,632 |
|
Total
Liabilities |
|
1,365,632 |
|
|
1,712,867 |
|
Commitments and
contingencies |
|
|
|
|
Limited Partners’ interests in
the Operating Partnership and other redeemable noncontrolling
interests |
|
45,383 |
|
|
45,743 |
|
Shareholders’
Equity: |
|
|
|
|
Kite Realty Group Trust Shareholders’ Equity: |
|
|
|
|
Common Shares, $.01 par value, 225,000,000 shares authorized,
83,963,983 and 83,800,886 shares issued and outstanding at
September 30, 2019 and December 31, 2018, respectively |
|
840 |
|
|
838 |
|
Additional paid in capital |
|
2,080,094 |
|
|
2,078,099 |
|
Accumulated other comprehensive loss |
|
(20,209 |
) |
|
(3,497 |
) |
Accumulated deficit |
|
(758,558 |
) |
|
(662,735 |
) |
Total Kite Realty Group Trust Shareholders’
Equity |
|
1,302,167 |
|
|
1,412,705 |
|
Noncontrolling Interests |
|
698 |
|
|
698 |
|
Total
Equity |
|
1,302,865 |
|
|
1,413,403 |
|
Total Liabilities and
Shareholders' Equity |
|
$ |
2,713,880 |
|
|
$ |
3,172,013 |
|
|
|
Kite Realty Group TrustConsolidated
Statements of OperationsFor the Three and Nine
Months Ended September 30, 2019 and
2018(Unaudited) |
|
($ in thousands,
except per share data) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenue: |
|
|
|
|
|
|
|
|
Rental income |
|
$ |
72,573 |
|
|
$ |
83,513 |
|
|
$ |
234,726 |
|
|
$ |
256,696 |
|
Other property related revenue |
|
2,260 |
|
|
2,129 |
|
|
4,910 |
|
|
8,119 |
|
Fee income |
|
110 |
|
|
105 |
|
|
304 |
|
|
2,430 |
|
Total
revenue |
|
74,943 |
|
|
85,747 |
|
|
239,940 |
|
|
267,245 |
|
Expenses: |
|
|
|
|
|
|
|
|
Property operating |
|
11,041 |
|
|
12,092 |
|
|
33,939 |
|
|
37,184 |
|
Real estate taxes |
|
9,640 |
|
|
11,205 |
|
|
29,775 |
|
|
32,351 |
|
General, administrative, and other |
|
6,709 |
|
|
4,865 |
|
|
20,523 |
|
|
16,364 |
|
Depreciation and amortization |
|
31,985 |
|
|
36,858 |
|
|
101,333 |
|
|
115,864 |
|
Impairment charges |
|
8,538 |
|
|
— |
|
|
37,723 |
|
|
38,847 |
|
Total
expenses |
|
67,913 |
|
|
65,020 |
|
|
223,293 |
|
|
240,610 |
|
(Loss) gain on sale of
operating properties, net |
|
(5,714 |
) |
|
— |
|
|
24,965 |
|
|
8,329 |
|
Operating
income |
|
1,316 |
|
|
20,727 |
|
|
41,612 |
|
|
34,964 |
|
Interest expense |
|
(14,302 |
) |
|
(16,058 |
) |
|
(46,884 |
) |
|
(49,141 |
) |
Income tax benefit of taxable REIT subsidiary |
|
41 |
|
|
27 |
|
|
189 |
|
|
78 |
|
Loss on debt extinguishment |
|
(7,045 |
) |
|
— |
|
|
(9,622 |
) |
|
— |
|
Equity in loss of unconsolidated subsidiary |
|
(11 |
) |
|
— |
|
|
(677 |
) |
|
— |
|
Other expense, net |
|
(116 |
) |
|
(379 |
) |
|
(444 |
) |
|
(643 |
) |
Net (loss)
income |
|
(20,117 |
) |
|
4,317 |
|
|
(15,826 |
) |
|
(14,742 |
) |
Net loss (income) attributable to noncontrolling interests |
|
382 |
|
|
(379 |
) |
|
10 |
|
|
(604 |
) |
Net (loss) income
attributable to Kite Realty Group Trust common
shareholders |
|
$ |
(19,735 |
) |
|
$ |
3,938 |
|
|
$ |
(15,816 |
) |
|
$ |
(15,346 |
) |
|
|
|
|
|
|
|
|
|
(Loss) income per
common share - basic and diluted |
|
$ |
(0.24 |
) |
|
$ |
0.05 |
|
|
(0.19 |
) |
|
(0.18 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding - basic |
|
83,960,841 |
|
|
83,706,704 |
|
|
83,914,923 |
|
|
83,670,038 |
|
Weighted average common shares
outstanding - diluted |
|
83,960,841 |
|
|
83,767,655 |
|
|
83,914,923 |
|
|
83,670,038 |
|
Cash dividends
declared per common share |
|
$ |
0.3175 |
|
|
$ |
0.3175 |
|
|
$ |
0.9525 |
|
|
$ |
0.9525 |
|
|
|
|
|
|
|
|
|
|
|
Kite Realty Group TrustFunds From
OperationsFor the Three and Nine Months Ended
September 30, 2019 and
2018(Unaudited) |
|
($ in thousands,
except per share data) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Funds From
Operations |
|
|
|
|
|
|
|
|
Consolidated net (loss) income |
|
$ |
(20,117 |
) |
|
$ |
4,317 |
|
|
$ |
(15,826 |
) |
|
$ |
(14,742 |
) |
Less: net income attributable
to noncontrolling interests in properties |
|
(132 |
) |
|
(285 |
) |
|
(396 |
) |
|
(979 |
) |
Less: loss (gain) on sales of
operating properties |
|
5,714 |
|
|
— |
|
|
(24,965 |
) |
|
(8,329 |
) |
Add: impairment charges |
|
8,538 |
|
|
— |
|
|
37,723 |
|
|
38,847 |
|
Add: depreciation and
amortization of consolidated and unconsolidated entities, net of
noncontrolling interests |
|
32,266 |
|
|
37,045 |
|
|
102,119 |
|
|
115,501 |
|
FFO of the
Operating Partnership1 |
|
26,269 |
|
|
41,077 |
|
|
98,655 |
|
|
130,298 |
|
Less: Limited Partners'
interests in FFO |
|
(627 |
) |
|
(986 |
) |
|
(2,365 |
) |
|
(3,127 |
) |
FFO attributable to
Kite Realty Group Trust common shareholders1 |
|
$ |
25,642 |
|
|
$ |
40,091 |
|
|
$ |
96,290 |
|
|
$ |
127,171 |
|
FFO, as defined by
NAREIT, per share of the Operating Partnership -
basic |
|
$ |
0.31 |
|
|
$ |
0.48 |
|
|
$ |
1.15 |
|
|
$ |
1.52 |
|
FFO, as defined by
NAREIT, per share of the Operating Partnership -
diluted |
|
$ |
0.30 |
|
|
$ |
0.48 |
|
|
$ |
1.15 |
|
|
$ |
1.52 |
|
|
|
|
|
|
|
|
|
|
FFO of the Operating
Partnership1 |
|
$ |
26,269 |
|
|
$ |
41,077 |
|
|
$ |
98,655 |
|
|
$ |
130,298 |
|
Add: loss on debt
extinguishment |
|
7,045 |
|
|
— |
|
|
9,622 |
|
|
— |
|
FFO, as adjusted, of
the Operating Partnership |
|
$ |
33,314 |
|
|
$ |
41,077 |
|
|
$ |
108,277 |
|
|
$ |
130,298 |
|
FFO, as adjusted, per
share of the Operating Partnership - basic and
diluted |
|
$ |
0.39 |
|
|
$ |
0.48 |
|
|
$ |
1.26 |
|
|
$ |
1.52 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding - basic |
|
83,960,841 |
|
|
83,706,704 |
|
|
83,914,923 |
|
|
83,670,038 |
|
Weighted average common shares
outstanding - diluted |
|
84,107,482 |
|
|
83,767,655 |
|
|
84,057,484 |
|
|
83,719,308 |
|
Weighted average common shares
and units outstanding - basic |
|
86,073,433 |
|
|
85,768,857 |
|
|
86,013,028 |
|
|
85,717,440 |
|
Weighted average common shares
and units outstanding - diluted |
|
86,220,075 |
|
|
85,829,808 |
|
|
86,155,588 |
|
|
85,766,710 |
|
|
|
|
|
|
|
|
|
|
FFO, as defined by NAREIT, per
diluted share/unit |
|
|
|
|
|
|
|
|
Consolidated net (loss)
income |
|
$ |
(0.23 |
) |
|
$ |
0.05 |
|
|
$ |
(0.18 |
) |
|
$ |
(0.17 |
) |
Less: net income attributable
to noncontrolling interests in properties |
|
— |
|
|
— |
|
|
— |
|
|
(0.01 |
) |
Less: Loss (gain) on sales of
operating properties |
|
0.07 |
|
|
— |
|
|
(0.29 |
) |
|
(0.10 |
) |
Add: impairment charges |
|
0.10 |
|
|
— |
|
|
0.44 |
|
|
0.45 |
|
Add: depreciation and
amortization of consolidated and unconsolidated entities, net of
noncontrolling interests |
|
0.37 |
|
|
0.43 |
|
|
1.18 |
|
|
1.35 |
|
FFO, as defined by
NAREIT, of the Operating Partnership per diluted
share/unit1 |
|
$ |
0.31 |
|
|
$ |
0.48 |
|
|
$ |
1.15 |
|
|
$ |
1.52 |
|
|
|
|
|
|
|
|
|
|
Add: loss on debt
extinguishment |
|
0.08 |
|
|
— |
|
|
0.11 |
|
|
— |
|
FFO, as adjusted, of
the Operating Partnership per diluted share/unit |
|
$ |
0.39 |
|
|
$ |
0.48 |
|
|
$ |
1.26 |
|
|
$ |
1.52 |
|
____________________ |
1 |
“FFO of the
Operating Partnership" measures 100% of the operating performance
of the Operating Partnership’s real estate properties. “FFO
attributable to Kite Realty Group Trust common shareholders”
reflects a reduction for the redeemable noncontrolling weighted
average diluted interest in the Operating Partnership. |
|
|
Funds from Operations (FFO) is a widely used performance measure
for real estate companies and is provided here as a supplemental
measure of operating performance. The Company calculates FFO, a
non-GAAP financial measure, in accordance with the best practices
described in the April 2002 National Policy Bulletin of the
National Association of Real Estate Investment Trusts ("NAREIT"),
as restated in 2018. The NAREIT white paper defines FFO as net
income (calculated in accordance with GAAP), excluding depreciation
and amortization related to real estate, gains and losses from the
sale of certain real estate assets, gains and losses from change in
control, and impairment write-downs of certain real estate assets
and investments, and after adjustments for unconsolidated
partnerships and joint ventures.
Considering the nature of our business as a real estate owner
and operator, the Company believes that FFO is helpful to investors
in measuring our operational performance because it excludes
various items included in net income that do not relate to or are
not indicative of our operating performance, such as gains or
losses from sales of depreciated property and depreciation and
amortization, which can make periodic and peer analyses of
operating performance more difficult. FFO (a) should not be
considered as an alternative to net income (calculated in
accordance with GAAP) for the purpose of measuring our financial
performance, (b) is not an alternative to cash flow from operating
activities (calculated in accordance with GAAP) as a measure of our
liquidity, and (c) is not indicative of funds available to satisfy
our cash needs, including our ability to make distributions. Our
computation of FFO may not be comparable to FFO reported by other
REITs that do not define the term in accordance with the current
NAREIT definition or that interpret the current NAREIT definition
differently than we do. For informational purposes, we have
also provided FFO adjusted for loss on debt extinguishment.
|
Kite Realty Group TrustSame Property Net
Operating IncomeFor the Three and Nine Months
Ended September 30, 2019 and
2018(Unaudited) |
|
($ in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
% Change |
|
2019 |
|
2018 |
|
% Change |
Number of properties for the
quarter1 |
86 |
|
|
86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased percentage at
period end |
95.3 |
% |
|
93.9 |
% |
|
|
|
95.3 |
% |
|
93.9 |
% |
|
|
Economic Occupancy
percentage2 |
92.2 |
% |
|
92.0 |
% |
|
|
|
92.3 |
% |
|
92.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rent |
$ |
51,206 |
|
|
$ |
50,374 |
|
|
|
|
$ |
161,900 |
|
|
$ |
160,181 |
|
|
|
Tenant recoveries |
15,505 |
|
|
15,270 |
|
|
|
|
47,312 |
|
|
46,444 |
|
|
|
Bad debt |
(569 |
) |
|
(395 |
) |
|
|
|
(1,555 |
) |
|
(1,261 |
) |
|
|
Other income |
341 |
|
|
395 |
|
|
|
|
1,088 |
|
|
947 |
|
|
|
|
66,483 |
|
|
65,644 |
|
|
|
|
208,745 |
|
|
206,311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses |
(8,635 |
) |
|
(8,436 |
) |
|
|
|
(25,963 |
) |
|
(26,306 |
) |
|
|
Real estate taxes |
(8,800 |
) |
|
(9,276 |
) |
|
|
|
(27,281 |
) |
|
(27,479 |
) |
|
|
|
(17,435 |
) |
|
(17,712 |
) |
|
|
|
(53,244 |
) |
|
(53,785 |
) |
|
|
Same Property NOI3 |
$ |
49,048 |
|
|
$ |
47,932 |
|
|
2.3 |
% |
|
$ |
155,501 |
|
|
$ |
152,526 |
|
|
2.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Same
Property NOI to Most Directly Comparable GAAP Measure: |
|
|
|
|
|
|
|
|
|
|
|
Net operating income - same
properties |
$ |
49,048 |
|
|
$ |
47,932 |
|
|
|
|
$ |
155,501 |
|
|
$ |
152,526 |
|
|
|
Net operating income -
non-same activity4 |
5,104 |
|
|
14,413 |
|
|
|
|
20,420 |
|
|
42,754 |
|
|
|
Other income (expense),
net |
24 |
|
|
(247 |
) |
|
|
|
(627 |
) |
|
1,865 |
|
|
|
General, administrative and
other |
(6,709 |
) |
|
(4,865 |
) |
|
|
|
(20,523 |
) |
|
(16,364 |
) |
|
|
Loss on debt
extinguishment |
(7,045 |
) |
|
— |
|
|
|
|
(9,622 |
) |
|
— |
|
|
|
Impairment charges |
(8,538 |
) |
|
— |
|
|
|
|
(37,723 |
) |
|
(38,847 |
) |
|
|
Depreciation and amortization
expense |
(31,985 |
) |
|
(36,858 |
) |
|
|
|
(101,333 |
) |
|
(115,864 |
) |
|
|
Interest expense |
(14,302 |
) |
|
(16,058 |
) |
|
|
|
(46,884 |
) |
|
(49,141 |
) |
|
|
(Loss) gain on sales of
operating properties |
(5,714 |
) |
|
— |
|
|
|
|
24,965 |
|
|
8,329 |
|
|
|
Net loss (income) attributable
to noncontrolling interests |
382 |
|
|
(379 |
) |
|
|
|
10 |
|
|
(604 |
) |
|
|
Net (loss) income attributable
to common shareholders |
$ |
(19,735 |
) |
|
$ |
3,938 |
|
|
|
|
$ |
(15,816 |
) |
|
$ |
(15,346 |
) |
|
|
1 |
Same Property NOI
excludes (i) The Corner, Courthouse Shadows, Glendale Town Center,
and Hamilton Crossing redevelopments, (ii) the recently completed
Fishers Station and Rampart Commons redevelopments, (iii) the
recently acquired Nora Plaza, and (iv) office properties. |
2 |
Excludes leases
that are signed but for which tenants have not yet commenced the
payment of cash rent. Calculated as a weighted average based
on the timing of cash rent commencement and expiration during the
period. |
3 |
Same Property NOI
excludes net gains from outlot sales, straight-line rent revenue,
lease termination fees, amortization of lease intangibles, fee
income and significant prior period expense recoveries and
adjustments, if any. |
4 |
Includes non-cash
activity across the portfolio as well as net operating income from
properties not included in the same property pool including
properties sold during both periods. |
|
|
The Company uses same property NOI ("Same Property NOI"), a
non-GAAP financial measure, to evaluate the performance of our
properties. Same Property NOI excludes properties that have not
been owned for the full period presented. It also excludes net
gains from outlot sales, straight-line rent revenue, lease
termination fees, amortization of lease intangibles and significant
prior period expense recoveries and adjustments, if any. The
Company believes that Same Property NOI is helpful to investors as
a measure of our operating performance because it includes only the
NOI of properties that have been owned and fully operational for
the full quarters presented. The Company believes such
presentation eliminates disparities in net income due to the
acquisition or disposition of properties during the particular
quarters presented and thus provides a more consistent comparison
of our properties. The year-to-date results represent the sum of
the individual quarters, as reported.
NOI and Same Property NOI should not, however, be considered as
alternatives to net income (calculated in accordance with GAAP) as
indicators of our financial performance. Our computation of NOI and
Same Property NOI may differ from the methodology used by other
REITs, and therefore may not be comparable to such other REITs.
When evaluating the properties that are included in the same
property pool, the Company has established specific criteria for
determining the inclusion of properties acquired or those recently
under development. An acquired property is included in the same
property pool when there is a full quarter of operations in both
years subsequent to the acquisition date. Development and
redevelopment properties are included in the same property pool
four full quarters after the properties have been transferred to
the operating portfolio. A redevelopment property is first excluded
from the same property pool when the execution of a redevelopment
plan is likely and the Company begins recapturing space from
tenants. For the quarter ended September 30, 2019, the Company
excluded four redevelopment properties and two recently completed
redevelopments from the same property pool that met these criteria
and were owned in both comparable periods. In addition, the
Company excluded one recently acquired property from the same
property pool.
|
Kite Realty Group TrustEarnings Before
Interest, Tax, Depreciation, and AmortizationFor
the Three Months Ended September 30,
2019(Unaudited) |
|
($ in
thousands) |
|
|
|
|
Three Months Ended September 30, 2019 or
Pro-Forma where Indicated |
Consolidated net loss |
|
$ |
(20,117 |
) |
Adjustments to net
income |
|
|
Depreciation and
amortization |
|
31,985 |
|
Interest expense |
|
14,302 |
|
Income tax benefit of taxable
REIT subsidiary |
|
(41 |
) |
Earnings Before
Interest, Taxes, Depreciation and Amortization
(EBITDA) |
|
26,129 |
|
Adjustments to EBITDA: |
|
|
Unconsolidated EBITDA |
|
726 |
|
Impairment charge |
|
8,538 |
|
Loss on sale of operating
properties |
|
5,714 |
|
Pro-forma adjustments3 |
|
(260 |
) |
Loss on debt
extinguishment |
|
7,045 |
|
Other income and expense,
net |
|
127 |
|
Noncontrolling interest |
|
(132 |
) |
Adjusted
EBITDA |
|
47,887 |
|
|
|
|
Annualized Adjusted
EBITDA1 |
|
191,548 |
|
EBITDA for properties sold
subsequent to September 30, 2019 |
|
(2,220 |
) |
Pro-forma Annualized
Adjusted EBITDA |
|
$ |
189,328 |
|
|
|
|
Company Share of Net
Debt: |
|
|
Mortgage and other
indebtedness |
|
$ |
1,198,584 |
|
Plus: Company Share of
Unconsolidated Joint Venture Debt |
|
22,148 |
|
Plus: Net debt premiums and
issuance costs, net |
|
6,970 |
|
Less: Partner share of
consolidated joint venture debt2 |
|
(1,120 |
) |
Less: Cash, cash equivalents,
and restricted cash |
|
(51,003 |
) |
Less: Pro-forma adjustment
4 |
|
(27,200 |
) |
Company Share of Net Debt |
|
$ |
1,148,379 |
|
Net Debt to Adjusted
EBITDA |
|
6.0x |
|
|
|
|
|
|
|
|
|
|
Proceeds from the sale of
properties subsequent to September 30, 2019 |
|
(31,600 |
) |
Pro-forma Company Share of Net
Debt |
|
1,116,779 |
|
Pro-forma Net Debt to
Adjusted EBITDA |
|
5.9x |
|
1 |
Represents Adjusted EBITDA for the three months ended September 30,
2019 (as shown in the table above) multiplied by four. |
2 |
Partner share of consolidated joint venture debt is calculated
based upon the partner's pro-rata ownership of the joint venture,
multiplied by the related secured debt balance. In all cases, this
debt is the responsibility of the consolidated joint venture. |
3 |
Relates to annualized EBITDA for properties sold and acquired
during the quarter and non-recurring non-cash adjustments. |
4 |
Relates to timing of quarterly dividend payment being made prior to
quarter-end resulting in four payments year to date. |
|
|
The Company defines EBITDA, a non-GAAP financial measure, as net
income before depreciation and amortization, interest expense and
income tax expense of taxable REIT subsidiary. For informational
purposes, the Company has also provided Adjusted EBITDA, which the
Company defines as EBITDA less (i) EBITDA from unconsolidated
entities, (ii) gains on sales of operating properties or impairment
charges, (iii) other income and expense, (iv) noncontrolling
interest EBITDA and (v) other non-recurring activity or items
impacting comparability from period to period. Annualized
Adjusted EBITDA is Adjusted EBITDA for the most recent quarter
multiplied by four. Net Debt to Adjusted EBITDA is the Company's
share of net debt divided by Annualized Adjusted EBITDA. EBITDA,
Adjusted EBITDA, Annualized Adjusted EBITDA and Net Debt to
Adjusted EBITDA, as calculated by us, are not comparable to EBITDA
and EBITDA-related measures reported by other REITs that do not
define EBITDA and EBITDA-related measures exactly as we do. EBITDA,
Adjusted EBITDA and Annualized Adjusted EBITDA do not represent
cash generated from operating activities in accordance with GAAP,
and should not be considered alternatives to net income as an
indicator of performance or as alternatives to cash flows from
operating activities as an indicator of liquidity.
Considering the nature of our business as a real estate owner
and operator, the Company believes that EBITDA, Adjusted EBITDA and
the ratio of Net Debt to Adjusted EBITDA are helpful to investors
in measuring our operational performance because they exclude
various items included in net income that do not relate to or are
not indicative of our operating performance, such as gains or
losses from sales of depreciated property and depreciation and
amortization, which can make periodic and peer analyses of
operating performance more difficult. For informational purposes,
the Company has also provided Annualized Adjusted EBITDA, adjusted
as described above. The Company believes this supplemental
information provides a meaningful measure of our operating
performance. The Company believes presenting EBITDA and the related
measures in this manner allows investors and other interested
parties to form a more meaningful assessment of our operating
results.
Contact Information: Kite Realty Group TrustJason ColtonSVP,
Capital Markets & Investor
Relations317.713.2762jcolton@kiterealty.com
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