![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ddr Corp. | NYSE:DDR | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 11.99 | 0.00 | 01:00:00 |
-- The Company's second quarter Funds From Operations ("FFO") was $0.51 per share before $240.0 million of net charges including the elimination of the gain on the repurchases of unsecured notes of $45.9 million. The Company's operating FFO for the six-month period was $1.18 per share before the $187.8 million of net charges including the elimination of the gain on repurchases of unsecured notes of $118.5 million. FFO and net loss for the three- and six-month periods ended June 30, 2009 reflected $240.0 million, or $1.66 per share, and $187.8 million, or $1.37 per share, of net charges, respectively, primarily non cash, summarized as follows (in millions):
Three Six Months Months ------- ------- Consolidated non-cash impairment charges - assets under contract to be sold and certain assets formerly occupied by Mervyns $ 107.0 $ 117.9 Less portion of impairment charges and losses allocated to non-controlling interests (Mervyns) (31.3) (31.1) Non-cash potential change-in-control compensation charge 10.5 10.5 Gain on repurchases of unsecured notes (45.9) (118.5) Loss on equity derivative instruments related to Otto investment 80.0 80.0 Loan loss reserve and other expenses 6.9 10.8 Impairment charges, derivative (gains)/losses and losses on asset sales - equity method investments 11.4 10.0 Non-cash impairment charges and loss on disposition - equity method investments 40.3 46.9 Impairment charges and loss on sales - discontinued operations 61.1 61.3 ------- ------- $ 240.0 $ 187.8 ======= =======
-- FFO applicable to common shareholders for the three-month period ended June 30, 2009, including the above net charges, was a loss of $166.5 million, or $1.15 per diluted share, which compares to revised FFO of $95.9 million, or $0.79 per diluted share, for the prior-year comparable period. Net loss applicable to common shareholders for the three-month period ended June 30, 2009 was $237.2 million or $1.64 per diluted share, which compares to revised net income of $26.1 million, or $0.22 per diluted share, for the prior-year comparable period. -- FFO applicable to common shareholders for the six-month period ended June 30, 2009, including the above net charges, was a loss of $26.5 million, or $0.19 per diluted share, which compares to revised FFO of $192.2 million, or $1.59 per diluted share, for the prior-year comparable period. Net loss applicable to common shareholders for the six-month period ended June 30, 2009 was $160.3 million, or $1.18 per diluted share, which compares to revised net income of $55.7 million, or $0.46 per diluted share, for the prior-year comparable period. -- The 2008 results for both the three- and six-month periods ended June 30, 2008 have been revised to reflect the change in accounting relating to convertible debt. This change resulted in additional non-cash interest expense of $3.3 million for both three-month periods ended June 30, 2009 and 2008, and $7.1 million and $6.5 million for the six-month periods ended June 30, 2009 and 2008, respectively. -- Executed leases during the second quarter of 2009 totaled a Company record of approximately 3.1 million square feet, including 147 new leases and 259 renewals. -- On a cash basis, base rental rates on new leases and renewals decreased 4.7% overall. -- Core portfolio leased percentage at June 30, 2009 was 90.7%, consistent with the level at March 31, 2009. -- Same store net operating income ("NOI") for the quarter decreased 5.0% over the prior-year comparable period. The decrease in same store NOI is primarily related to the bankruptcies and subsequent store closings of Circuit City, Linens 'N Things, Goody's and Steve & Barry's.
Scott A. Wolstein, Developers Diversified's Chairman and Chief Executive Officer, stated, "Our second quarter 2009 operating results came in as expected despite the continued challenging environment. Our portfolio's leased rate remained stable, and leasing activity remained robust with deals for over 3 million square feet of space being executed.
"Our de-leveraging plans remain on track and we remain intensely focused on executing upon our capital raising and debt reducing initiatives. Our activities to date have addressed our 2009 and 2010 maturities, and we have a capital plan in place that addresses our 2011 and 2012 needs well before maturity."
Financial Results:
Net loss applicable to common shareholders was $237.2 million, or $1.64 per share (diluted and basic), for the three-month period ended June 30, 2009, as compared to revised net income of $26.1 million, or $0.22 per share (diluted and basic), for the prior-year comparable period.
FFO applicable to common shareholders was a loss of $166.5 million for the three-month period ended June 30, 2009, as compared to revised FFO income of $95.9 million for the three-month period ended June 30, 2008. For the three-month period ended June 30, 2009, FFO per share was a loss of $1.15 (diluted and basic) compared to revised FFO income of $0.79 (diluted and basic) for the prior-year comparable period. The decrease in net income and reported loss for the three-month period ended June 30, 2009, is primarily the result of $240.0 million of net charges, mainly non cash as detailed above, in addition to several tenant bankruptcies in late 2008 and early 2009, also discussed above.
Net loss applicable to common shareholders was $160.3 million, or $1.18 per share (diluted and basic), for the six-month period ended June 30, 2009, as compared to revised net income of $55.7 million, or $0.46 per share (diluted and basic), for the prior-year comparable period.
FFO applicable to common shareholders was a loss of $26.5 million for the six-month period ended June 30, 2009, as compared to revised FFO income of $192.2 million for the six-month period ended June 30, 2008. For the six-month period ended June 30, 2009, FFO per share was a loss of $0.19 (diluted and basic) compared to revised FFO income of $1.59 (diluted and basic) for the prior-year comparable period. The decrease in net income and reported loss for the six-month period ended June 30, 2009, is primarily the result of $187.8 million of net charges, mainly non cash as detailed above, in addition to several tenant bankruptcies also discussed above.
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 provides an additional indicator of the financial performance of a REIT. The Company also believes that FFO more appropriately measures the core operations of the Company and provides a benchmark to its peer group. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles ("GAAP"), is not 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 from disposition of depreciable real estate property, except for those sold through the Company's merchant building program, which are presented net of taxes, (iii) extraordinary items and (iv) 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. Other real estate companies may calculate FFO in a different manner. FFO excluding the non-operating charges detailed above is useful to investors as the Company removes these charges to analyze the results of operations and assess performance of the core operating real estate portfolio. A reconciliation of net income to FFO is presented in the financial highlights section.
Leasing:
The following results for the three-month period ended June 30, 2009 highlight continued strong leasing activity throughout the portfolio despite the current economic environment:
-- Executed 147 new leases aggregating approximately 0.9 million square feet and 259 renewals aggregating approximately 2.2 million square feet. -- On a cash basis, rental rates for new leases and renewals decreased 4.7%. -- Total portfolio average annualized base rent per occupied square foot, excluding assets in Brazil, as of June 30, 2009 was $12.49, as compared to $12.41 at June 30, 2008. -- Core portfolio leased rate was 90.7% as of June 30, 2009, as compared to 95.5% at June 30, 2008 and 90.7% at March 31, 2009.
Overall, the Company is encouraged by the leasing activity achieved during the second quarter. On a square foot basis, these leasing results represent the greatest level of production in the history of the Company. While the resulting rental spreads are much less favorable than what the Company has historically achieved, it should be no surprise that rental rates are under pressure as bankruptcy driven vacancy has increased across the retail sector.
Total annual recurring leasing capital expenditures for the Company and its joint ventures are estimated to be approximately $32 million ($0.27 per square foot of owned GLA) in 2009 calculated based on 100% of the funding.
Strategic Transactions:
On February 23, 2009, the Company entered into a stock purchase agreement (the "Stock Purchase Agreement") with Mr. Alexander Otto (the "Investor") to issue and sell 30 million common shares for aggregate gross proceeds of approximately $112.5 million to the Investor and certain members of his family (collectively with the Investor, the "Otto Family"). In addition, the Company will issue warrants to purchase up to 10 million common shares with an exercise price of $6.00 per share to the Otto Family. The share issuance, together with the warrants issuances are collectively referred to as the "Otto Transaction". Under the terms of the Stock Purchase Agreement, the Company will also issue additional common shares to the Otto Family in an amount equal to any dividends declared, associated with the issuance of common shares, by the Company after February 23, 2009 and prior to the applicable closing of the stock purchase by the Investor. On April 9, 2009, the Company's shareholders approved the sale of the common shares and warrants to the Otto Family pursuant to the Otto Transaction. The transaction will occur in two closings. The second closing with the Otto Family is contracted to close before October 9, 2009. On May 11, 2009, the Company issued and sold 15.0 million shares and warrants to purchase 5.0 million common shares to the Otto Family for a purchase price of $52.5 million. The Company also issued an additional 1,071,428 shares as a result of the first quarter 2009 dividend to the Otto Family associated with the initial 15.0 million shares. In June 2009, the Otto Family earned the right to receive an additional 1,787,304 shares relating to the 2009 dividends declared to date associated with the second tranche of 15.0 million shares.
The shareholders' approval of the Otto Transaction in April 2009 resulted in a "potential change in control" under the Company's equity-based award plans. In addition, when the Otto Family acquires beneficial ownership of 20% or more of the Company's outstanding common shares as expected, a "change in control" will be deemed to have occurred under the Company's equity deferred compensation plans. In accordance with the equity-based award plans, all unvested stock options became fully exercisable and all restrictions on unvested shares lapsed, and, in accordance with the equity deferred compensation plans, it is expected that all unvested deferred stock units will become vested and no longer subject to forfeiture. As such, in April 2009, the Company recorded an accelerated non-cash charge of approximately $10.5 million in accordance with SFAS 123(R) related to these equity awards. The Company expects to record an additional non-cash charge of $4.7 million upon the occurrence of the change in control later in 2009 upon the closing of the second tranche of shares to the Otto Family.
In addition, the shares and warrants were required to be recognized at fair value in April 2009 and marked-to-market through earnings thereafter until settlement or expiration. As a result, the Company reported an aggregate non-cash loss of $80.0 million, or $0.55 per diluted share, relating to the valuation adjustments associated with these instruments in the second quarter of 2009, due to the appreciation in share price.
Dispositions:
The Company sold nine properties, aggregating 1.0 million square feet, in the second quarter of 2009, generating gross proceeds of $82.4 million. The Company recorded an aggregate loss on sale of approximately $36.3 million related to these assets. The Company's joint ventures sold four properties, aggregating 0.4 million square feet in the second quarter of 2009, generating gross proceeds of $30.8 million.
The Company sold an additional four properties to date in the third quarter of 2009 generating gross proceeds of approximately $48.2 million. Impairment charges of $16.1 million were recorded in the second quarter of 2009 relating to these assets.
Wholly-Owned and Consolidated Joint Venture Development:
The Company currently has the following wholly-owned and consolidated joint venture shopping center projects under construction:
Expected Remaining Initial Cost Anchor Location Owned GLA ($ Millions) Opening * Description ---------- --------- ---------- ---------------- Miami (Homestead), Florida** 272,610 $ (3.1) 2H 08 Community Center Boise (Nampa), Idaho 431,689 37.4 2H 07 Community Center Boston (Norwood), Massachusetts 56,343 7.9 1H 10 Community Center Elmira (Horseheads), New York 350,987 10.9 1H 07 Community Center Raleigh (Apex), North Carolina (Promenade) 72,830 5.3 1H 09 Community Center Austin (Kyle), Texas *** 443,092 25.4 2H 09 Community Center ---------- --------- Total 1,627,551 $ 83.8 ---------- --------- * 1H = First Half, 2H = Second Half; either actual or anticipated ** Includes a reduction in costs from future land sales *** Consolidated 50% Joint Venture
In addition to these current developments, several of which will be developed in phases, the Company and its joint venture partners intend to commence construction on various other developments only after substantial tenant leasing has occurred and acceptable construction financing is available, including several international projects.
Unconsolidated Joint Venture Development:
The Company's unconsolidated joint ventures have the following shopping center projects under construction.
DDR's Expected Effective Remaining Initial Ownership Cost Anchor Location Percentage Owned GLA ($ Millions) Opening* Description --------- ---------- --------- ---------- ---------------- Kansas City (Merriam), Kansas** 20.0% 158,632 $ (1.8) TBD Community Center Dallas (Allen), Texas** 10.0% 797,665 (0.3) 1H 08 Lifestyle Center Manaus, Brazil 47.4% 502,529 13.4 1H 09 Enclosed Mall ---------- --------- Total 1,458,826 $ 11.3 ---------- --------- * 1H = First Half, 2H = Second Half; either actual or anticipated; TBD = to be determined. ** Includes a reduction in costs from future land sales
Wholly-Owned and Consolidated Joint Venture Redevelopments and Expansions:
The Company is currently expanding/redeveloping the following wholly-owned and consolidated joint venture shopping centers at a projected aggregate net cost of approximately $109.4 million. At June 30, 2009, approximately $82.4 million of costs had been incurred in relation to these projects.
Property Description --------------------------- --------------------------- Miami (Plantation), Florida Redevelop shopping center to include Kohl's and additional junior tenants Chesterfield, Michigan Construct 25,400 sf of small shop space and retail space Fayetteville, North Carolina Redevelop 18,000 sf of small shop space and construct an outparcel building
Unconsolidated Joint Venture Redevelopments and Expansions:
The Company's unconsolidated joint ventures are currently expanding/redeveloping the following shopping centers at a projected net cost of $154.3 million, which includes original acquisition costs related to assets acquired for redevelopment. At June 30, 2009, approximately $118.9 million of costs had been incurred in relation to these projects.
DDR's Effective Ownership Property Percentage Description ----------- ----------- ----------- Buena Park, California 20% Large-scale redevelopment of enclosed mall to open-air format Los Angeles (Lancaster), California 21% Relocate Walmart and redevelop former Walmart space Benton Harbor, Michigan 20% Construct 89,000 square feet of anchor space and retail shops
Dividends:
The Company's second quarter dividend was paid in a combination of cash and the Company's common shares. The aggregate amount of cash paid to shareholders on July 21, 2009, was limited to 10% of the total dividend paid. The Company issued approximately 6.1 million common shares based on volume weighted average trading prices of $4.49 per share and paid $3.1 million in cash. This payout initiative is consistent with the first quarter dividend payout and is a part of the Company's strategy to further enhance liquidity and maximize free cash flow while continuing to maintain its REIT status.
Financings:
In the second quarter of 2009, the Company purchased approximately $212.7 million face amount of its outstanding senior notes at a discount to par resulting in a gross gain of approximately $54.1 million. This gain was reduced by approximately $8.2 million due to the adoption of FSP APB 14-1, "Accounting for Convertible Debt That May Be Settled in Cash Upon Conversion", on January 1, 2009 ("Convertible Debt Restatement").
In July 2009, the Company obtained a $17 million of mortgage debt from a life insurance company on two shopping centers at a 6% interest rate and maturing in 2017.
In May 2009, the Company completed an $85 million, 10-year loan secured by four assets in Puerto Rico with a fixed interest coupon rate of 7.59%. Also, in May 2009, the Company completed a $40 million, two-year secured loan with a one-year extension option. The loan has a floating interest rate of LIBOR plus 600 basis points with a LIBOR floor of 2.5%.
A $60 million six-month bridge loan funded by the Otto Family in March 2009 was converted in May 2009 into a five-year fixed-rate term loan with a 9% interest rate.
Developers Diversified Realty Corporation as of June 30, 2009 owned and managed approximately 690 retail operating and development properties in 45 states, plus Puerto Rico, Brazil and Canada, totaling approximately 153 million square feet. Developers Diversified Realty Corporation is a self-administered and self-managed REIT operating as a fully integrated real estate company which acquires, develops, leases and manages shopping centers.
A copy of the Company's Supplemental Financial/Operational package is available to all interested parties upon request at our corporate office to Thomas Morabito, Senior Director of Investor Relations, Developers Diversified Realty Corporation, 3300 Enterprise Parkway, Beachwood, Ohio 44122 or on our Web site which is located at http://www.ddr.com.
Developers Diversified Realty Corporation 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 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 sell assets on commercially reasonable terms; 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; our ability to continue to satisfy conditions to consummate the sale of the second tranche of common shares to the Otto Family; and the finalization of the financial statements for three-month period ended June 30, 2009. 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 as of December 31, 2008. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (In thousands - except per share data) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2009 2008(E) 2009 2008(E) ---------- ---------- ---------- ---------- Revenues: Minimum rents (A) $ 137,696 $ 151,743 $ 278,692 $ 303,818 Percentage and overage rents (A) 1,038 1,145 3,641 3,909 Recoveries from tenants 44,829 46,162 92,714 97,403 Ancillary and other property income 4,974 6,256 10,012 10,866 Management, development and other fee income 14,040 15,637 28,502 31,924 Other (B) 1,732 1,691 4,982 4,728 ---------- ---------- ---------- ---------- 204,309 222,634 418,543 452,648 ---------- ---------- ---------- ---------- Expenses: Operating and maintenance 35,292 33,373 70,805 68,289 Real estate taxes 27,671 26,884 56,112 53,205 Impairment charges (C) 107,014 - 117,919 - General and administrative (D) 28,412 21,333 47,583 42,047 Depreciation and amortization 58,641 55,886 119,900 109,669 ---------- ---------- ---------- ---------- 257,030 137,476 412,319 273,210 ---------- ---------- ---------- ---------- Other income (expense): Interest income 3,228 547 6,257 1,115 Interest expense (E) (59,962) (62,362) (119,219) (125,612) Gain on repurchases of senior notes 45,901 200 118,479 200 Loss on equity derivative instruments (F) (80,025) - (80,025) - Other expenses (G) (6,913) (102) (10,575) (600) ---------- ---------- ---------- ---------- (97,771) (61,717) (85,083) (124,897) ---------- ---------- ---------- ---------- (Loss) income before equity in net (loss) income of joint ventures, impairment of joint venture investments, income tax (expense) benefit of taxable REIT subsidiaries and franchise taxes, discontinued operations and gain on disposition of real estate, net of tax (150,492) 23,441 (78,859) 54,541 Equity in net (loss) income of joint ventures (H) (9,153) 12,555 (8,801) 19,943 Impairment of joint venture investments (C) (40,266) - (41,140) - Income tax (expense) benefit of taxable REIT subsidiaries and franchise taxes (920) (286) 110 (1,317) ---------- ---------- ---------- ---------- (Loss) income from continuing operations (200,831) 35,710 (128,690) 73,167 (Loss) income from discontinued operations (I) (60,821) 2,070 (48,634) 4,777 ---------- ---------- ---------- ---------- (Loss) income before gain on disposition of real estate (261,652) 37,780 (177,324) 77,944 Gain on disposition of real estate, net of tax 648 908 1,096 3,275 ---------- ---------- ---------- ---------- Net (loss) income (261,004) 38,688 (176,228) 81,219 Loss (income) attributable to non-controlling interests (J) 34,419 (2,025) 37,044 (4,396) ---------- ---------- ---------- ---------- Net (loss) income attributable to DDR $ (226,585) $ 36,663 $ (139,184) $ 76,823 ========== ========== ========== ========== Net (loss) income applicable to common shareholders $ (237,152) $ 26,096 $ (160,318) $ 55,689 ========== ========== ========== ========== Funds From Operations ("FFO"): Net (loss) income applicable to common shareholders $ (237,152) $ 26,096 $ (160,318) $ 55,689 Depreciation and amortization of real estate investments 57,565 57,279 118,601 111,641 Equity in net loss (income) of joint ventures (H) 9,153 (12,555) 8,374 (19,943) Joint ventures' FFO (H) 3,809 25,908 18,968 45,088 Non-controlling interests (OP Units) (J) 80 290 159 884 Loss (gain) on disposition of depreciable real estate 60 (1,133) (12,274) (1,151) ---------- ---------- ---------- ---------- FFO applicable to common shareholders (166,485) 95,885 (26,490) 192,208 Preferred dividends 10,567 10,567 21,134 21,134 ---------- ---------- ---------- ---------- FFO $ (155,918) $ 106,452 $ (5,356) $ 213,342 ========== ========== ========== ========== Per share data: Earnings per common share Basic $ (1.64) $ 0.22 $ (1.18) $ 0.46 ========== ========== ========== ========== Diluted $ (1.64) $ 0.22 $ (1.18) $ 0.46 ========== ========== ========== ========== Dividends Declared $ 0.20 $ 0.69 $ 0.40 $ 1.38 ========== ========== ========== ========== Funds From Operations - Basic (K) $ (1.15) $ 0.79 $ (0.19) $ 1.59 ========== ========== ========== ========== Funds From Operations - Diluted (L) $ (1.15) $ 0.79 $ (0.19) $ 1.59 ========== ========== ========== ========== Basic - average shares outstanding 144,227 119,390 136,514 119,269 ========== ========== ========== ========== Diluted - average shares outstanding 144,227 120,342 136,514 119,430 ========== ========== ========== ==========
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (In thousands - except per share data)
(A) Base and percentage rental revenues for the six-month period ended June 30, 2009, as compared to the prior-year comparable period, decreased $25.4 million primarily due to store closings related to five major tenant bankruptcies which aggregated $23.1 million, the most significant of which related to the assets formerly occupied by Mervyns, which is 50% owned by the Company through a consolidated joint venture. There was also a decrease of $2.9 million in straight line rental income, a majority of which is related to major tenant bankruptcies and a $0.2 million decrease related to the Company's business centers. These decreases were off set by net increased leasing activity of $0.8 million. Included in rental revenues for the six-month periods ended June 30, 2009 and 2008, is approximately $1.3 million and $4.9 million, respectively, of revenue resulting from the recognition of straight-line rents, including discontinued operations.
(B) Other income for the three- and six-month periods ended June 30, 2009 and 2008 was comprised of the following (in millions):
Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2009 2008 2009 2008 --------- --------- --------- --------- Lease termination fees $ 1.1 $ 1.4 $ 2.6 $ 4.2 Financing fees 0.3 0.1 0.6 0.1 Other miscellaneous 0.3 0.2 1.8 0.4 --------- --------- --------- --------- $ 1.7 $ 1.7 $ 5.0 $ 4.7 ========= ========= ========= =========
(C) The Company recorded impairment charges on consolidated assets that are either under contract or being marketed for sale as the book basis of the assets was in excess of the estimated fair market value. Of this amount, $61.0 million related to impairment charges on 13 assets formerly occupied by Mervyns, of which the Company's proportionate share was $29.7 million after adjusting for the allocation of the loss to the non- controlling interest in this consolidated joint venture. An additional $25.1 million (see footnote I) was reported as a component of discontinued operations relating to those assets classified as held for sale pursuant to SFAS No. 144 and $36.0 million was reflected as actual loss on sale as part of discontinued operations.
In addition, the Company recorded an approximate $40.3 million in impairment charges associated with joint venture investments in accordance with APB Opinion No. 18, "The Equity Method of Accounting for Investment in Common Stock." These charges primarily related to the Company's investments in the Coventry II joint ventures.
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (In thousands - except per share data)
(D) General and administrative expenses include internal leasing salaries, legal salaries and related expenses associated with the releasing of space, which are charged to operations as incurred. For the six-month periods ended June 30, 2009 and 2008, general and administrative expenses were approximately 5.4% and 4.4% of total revenues, including joint venture revenues, respectively. In the second quarter, the Company recorded a non-cash charge of $10.5 million as a result of the potential change in control provisions included in the Company's equity-based award plans triggered from the shareholder approval of the Otto Transaction, as previously discussed. Excluding this charge, general and administrative expenses were 4.2% of total revenues for the six-month period ended June 30, 2009.
(E) In 2009, the Company adopted FSP APB 14-1. The adoption of this FSP required the Company to restate its interest expense and record a non-cash interest-related charge of $3.3 million and $6.5 million, net of capitalized interest, for the three and six months ended June 30, 2008, respectively. The Company recorded non-cash interest expense of approximately $3.3 million and $7.1 million for the three and six months ended June 30, 2009, respectively, in accordance with this new accounting standard.
(F) Represents the impact of the valuation adjustments for the equity derivative instruments issued as part of the Otto Transaction. The total non-cash charge includes a $38.0 million expense recognized on the 16.1 million shares issued to the Otto Family in May 2009. The level of expense recognized primarily relates to the difference between the closing trading value of the Company's common shares of $3.12 on April 9, 2009, which was less than closing trading value of the Company's common shares on the May 11, 2009 issuance date of $5.48. The balance of the $80.0 million expense included $31.7 million recognized on the valuation adjustment of the second tranche of 15.0 million common shares expected to be issued later in 2009 including the impact of declared dividends payable in common shares, as well as $10.3 million relating to the warrant valuation adjustments.
(G) Other expenses primarily related to a reserve associated with a mezzanine note receivable of $5.4 million as well as litigation-related expenditures, the write off of costs related to abandoned development projects and costs incurred for transactions that are not expected to close.
(H) The following is a summary of the combined operating results of the Company's joint ventures:
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (In thousands - except per share data) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2009 2008 2009 2008 --------- --------- --------- --------- Revenues from operations (a) $ 216,639 $ 233,416 $ 445,205 $ 468,476 --------- --------- --------- --------- Operating expense (b) 101,196 78,631 188,274 158,627 Depreciation and amortization of real estate investments 62,402 59,126 125,788 115,008 Interest expense 83,511 71,360 153,820 148,018 --------- --------- --------- --------- 247,109 209,117 467,882 421,653 --------- --------- --------- --------- (Loss) income from operations before tax expense and discontinued operations (30,470) 24,299 (22,677) 46,823 Income tax expense (2,562) (2,865) (4,552) (6,645) (Loss) income from discontinued operations, net of tax (b) (13,131) 826 (12,324) 1,332 Loss on disposition of discontinued operations, net of tax (c) (6,048) - (6,077) 340 Loss on disposition of assets - (11) (26,741) (13) Other, net (d) (2,241) 50,100 9,437 56,539 --------- --------- --------- --------- Net (loss) income $ (54,452) $ 72,349 $ (62,934) $ 98,376 ========= ========= ========= ========= DDR ownership interests (e) $ (11,876) $ 12,740 $ (11,073) $ 20,214 ========= ========= ========= =========
FFO from joint ventures are summarized as follows:
Net (loss) income $ (54,452) $ 72,349 $ (62,934) $ 98,376 (Loss) income on disposition of real estate, including discontinued operations - 11 - 13 Depreciation and amortization of real estate investments 62,947 59,845 127,037 116,449 --------- ---------- --------- ---------- $ 8,495 $ 132,205 $ 64,103 $ 214,838 ========= ========== ========= ========== DDR ownership interests (e) $ 3,809 $ 25,908 $ 18,968 $ 45,808 ========= ========== ========= ========== DDR joint venture distributions received, net $ 7,061 $ 12,601 $ 15,736 $ 26,301 ========= ========== ========= ==========
(a) Revenues for the three-month periods ended June 30, 2009 and 2008 included approximately $0.9 million and $1.8 million, respectively, resulting from the recognition of straight-line rents, of which the Company's proportionate share was $0.1 million and $0.3 million, respectively. Revenues for the six-month periods ended June 30, 2009 and 2008 included approximately $1.7 million and $4.1 million, respectively, resulting from the recognition of straight-line rents, of which the Company's proportionate share was $0.1 million and $0.5 million, respectively.
(b) The DDR Macquarie Fund reported impairment losses on three assets under contract to be sold aggregating $33.9 million. Of this amount, approximately $20.2 million was reported as a component of operating expenses and $13.7 million was reported as a component of discontinued operations relating to the one asset classified as held for sale pursuant to SFAS No. 144. The Company's proportionate share of these impairment losses aggregated $5.5 million for both the three and six month periods.
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (In thousands - except per share data)
(c) Loss on disposition of discontinued operations consists of the sale of four properties by two separate unconsolidated joint ventures in the second quarter of 2009 resulting in a loss of $6.0 million of which the Company's proportionate share was $1.4 million for the three- and six-months ended June 30, 2009.
(d) Includes the effects of certain derivative instruments that are marked-to-market through earnings from the Company's equity investment in Macquarie DDR Trust aggregating approximately $2.2 million of loss and $9.4 million of income for the three- and six-month periods ended June 30, 2009, respectively, of which the Company's share was approximately $0.2 million and $1.0 million, respectively.
(e) The Company's share of joint venture net loss was decreased by $2.7 million and the equity in net income was decreased by $0.2 million for the three-month periods ended June 30, 2009 and 2008, respectively. The Company's share of joint venture net loss was decreased by $2.3 million and the equity in net income was decreased by $0.3 million for the six-month periods ended June 30, 2009 and 2008, respectively. These adjustments relate primarily to basis differences impacting amortization and depreciation and (loss) gain on dispositions.
At June 30, 2009 and 2008, the Company owned joint venture interests, excluding consolidated joint ventures, in 324 and 317 shopping center properties, respectively.
(I) The operating results relating to assets classified as discontinued operations are summarized as follows:
Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2009 2008 2009 2008 --------- ---------- --------- ---------- Revenues $ 4,347 $ 10,426 $ 10,020 $ 22,428 --------- ---------- --------- ---------- Expenses: Operating 1,116 3,222 2,748 6,677 Impairment charges 25,091 - 25,091 - Interest, net 1,439 2,169 3,079 4,393 Depreciation 1,499 4,043 3,320 7,467 --------- ---------- --------- ---------- Total expenses 29,145 9,434 34,238 18,537 --------- ---------- --------- ---------- (Loss) income before (loss) gain on disposition of real estate (24,798) 992 (24,218) 3,891 (Loss) gain on disposition of real estate, net (36,023) 1,078 (24,416) 886 --------- ---------- --------- ---------- Net (loss) income $ (60,821) $ 2,070 $ (48,634) $ 4,777 ========= ========== ========= ========== DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (In thousands - except per share data)
(J) Non-controlling interests are comprised of the following:
Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2009 2008 2009 2008 --------- --------- --------- --------- Loss (income) attributable to non-controlling interests $ 34,425 $ (2,005) $ 37,056 $ (4,356) Loss attributable to redeemable operating partnership units (6) (20) (12) (40) --------- --------- --------- --------- $ 34,419 $ (2,025) $ 37,044 $ (4,396) ========= ========= ========= ========= In June 2008, 0.5 million operating partnership units were converted into an equivalent number of common shares of the Company.
(K) For purposes of computing FFO per share (basic), the weighted average shares outstanding were adjusted to reflect the assumed conversion of approximately 0.4 million Operating Partnership Units ("OP Units") outstanding at June 30, 2009 and 2008, into 0.4 million common shares for the three-and six-month periods ended June 30, 2009 and 0.8 million common shares for the three-and six-month periods ended June 30, 2008, on a weighted average basis. The weighted average diluted shares and OP Units outstanding, for purposes of computing FFO were approximately 144.6 million and 120.8 million for the three-month periods ended June 30, 2009 and 2008, respectively and 136.9 million and 120.7 million for the six-month periods ended June 30, 2009 and 2008, respectively.
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (In thousands) Selected Balance Sheet Data (A): December 31, June 30, 2009 2008 (B) ------------- ------------- Assets: Real estate and rental property: Land $ 2,013,216 $ 2,073,947 Buildings 5,623,674 5,890,332 Fixtures and tenant improvements 270,353 262,809 ------------- ------------- 7,907,243 8,227,088 Less: Accumulated depreciation (1,282,375) (1,208,903) ------------- ------------- 6,624,868 7,018,185 Construction in progress 908,121 882,478 Assets held for sale 51,781 - ------------- ------------- Real estate, net 7,584,770 7,900,663 Investments in and advances to joint ventures 560,112 583,767 Cash 28,745 29,494 Restricted cash (C) 112,802 111,792 Notes receivable 74,691 75,781 Receivables, including straight-line rent, net 149,452 164,356 Other assets, net 141,418 154,369 ------------- ------------- $ 8,651,990 $ 9,020,222 ============= ============= Liabilities: Indebtedness: Revolving credit facilities $ 1,169,503 $ 1,027,183 Unsecured debt 1,821,209 2,402,032 Mortgage and other secured debt 2,573,990 2,437,440 ------------- ------------- 5,564,702 5,866,655 Dividends payable 37,703 6,967 Other liabilities (D) 280,639 281,179 ------------- ------------- 5,883,044 6,154,801 Redeemable operating partnership units 627 627 Equity 2,768,319 2,864,794 ------------- ------------- $ 8,651,990 $ 9,020,222 ============= =============
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (In thousands)
(A) Amounts include the consolidation of a 50% owned joint venture, DDR MDT MV LLC ("MV LLC"), that owns 32 sites formerly occupied by Mervyns at June 30, 2009, which includes $255.5 million and $348.5 million of real estate assets at June 30, 2009 and December 31, 2008, respectively. Mortgage debt relating to these assets aggregated $237.5 million and $258.5 million at June 30, 2009 and December 31, 2008, respectively. Non-controlling interests relating to this joint venture aggregated $32.6 million and $70.2 million at June 30, 2009 and December 31, 2008, respectively.
(B) The December 31, 2008 selected balance sheet data was revised to reflect the adoption of two accounting standards in the first quarter of 2009.
-- The Company adopted the provisions of FSP APB 14-1, resulting in the Convertible Debt Restatement. The Company increased real estate assets by $2.9 million and shareholders' equity by $52.6 million and decreased unsecured debt by $50.7 million and deferred charges by $1.0 million.
-- The Company adopted the provisions of SFAS No. 160, "Non-controlling Interests in Consolidated Financial Statements - an Amendment of ARB No. 51," which impacted the accounting for transactions with non-controlling shareholders. The Company no longer has a line item in its balance sheet referred to as Minority Interests. Equity at December 31, 2008 has been revised to include $120.1 million attributable to non-controlling interests. Equity at June 30, 2009 includes $98.8 million attributable to non-controlling interests.
(C) Restricted cash primarily consists of $64.2 million and $64.8 million at MV LLC at June 30, 2009 and December 31, 2008, respectively. At June 30, 2009, the MV LLC restricted cash is comprised of $23.9 million received from the seller of the Mervyns portfolio relating to Mervyns bankruptcy filing in the third quarter 2008, a $33.0 million net capital contribution by the members of MV LLC, and $7.3 million related to a security deposit letter of credit, all of which are required to be held in escrow by the lender. Also included is $46.0 million and $47.0 million at June 30, 2009 and December 31, 2008, respectively, relating to the terms of a bond issue for one of the Company's projects in Mississippi.
(D) Includes a $41.2 million non-cash liability relating to the equity derivative instruments deemed issued in connection with the Otto Transaction as of June 30, 2009. The instruments will be reclassified into equity upon ultimate exercise or expiration of the instruments.
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (in thousands) Selected Balance Sheet Data (Continued): Combined condensed balance sheets relating to the Company's joint ventures are as follows: June 30, December 31, 2009 2008 ------------ ------------ Land $ 2,368,888 $ 2,378,033 Buildings 6,443,218 6,353,985 Fixtures and tenant improvements 153,654 131,622 ------------ ------------ 8,965,760 8,863,640 Less: Accumulated depreciation (706,457) (606,530) ------------ ------------ 8,259,303 8,257,110 Construction in progress 309,156 412,357 ------------ ------------ Real estate, net 8,568,459 8,669,467 Receivables, including straight-line rent, net 150,797 136,410 Leasehold interests 12,035 12,615 Other assets 358,344 315,591 ------------ ------------ $ 9,089,635 $ 9,134,083 Mortgage debt (a) $ 5,768,969 $ 5,776,897 Notes and accrued interest payable to DDR 73,272 64,967 Other liabilities 252,800 237,363 ------------ ------------ 6,095,041 6,079,227 Accumulated equity 2,994,594 3,054,856 ------------ ------------ $ 9,089,635 $ 9,134,083 ============ ============ (a) The Company's proportionate share of joint venture debt aggregated approximately $1,209.9 million and $1,216.1 million at June 30, 2009 and December 31, 2008, respectively.
Media Contact: Scott Schroeder 216-755-5500 Email Contact Investor Contact: Thomas Morabito 216-755-5500 Email Contact
1 Year Developers Realty Chart |
1 Month Developers Realty Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions