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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Pennsylvania Real Estate Investment Trust | NYSE:PEI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.39 | 0 | 01:00:00 |
PHILADELPHIA, Feb. 25, 2020 /PRNewswire/ -- PREIT (NYSE: PEI) today reported results for the three months and the year ended December 31, 2019. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is located in the tables accompanying this release.
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||
(per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Net income (loss) - basic and diluted | $ | (0.29) | $ | (1.23) | $ | (0.52) | $ | (1.98) | ||||||||||
FFO | $ | 0.28 | $ | 0.42 | $ | 1.33 | $ | 1.43 | ||||||||||
FFO, as adjusted | $ | 0.34 | $ | 0.52 | $ | 1.05 | $ | 1.54 | ||||||||||
FFO from assets sold in 2019 | $ | - | $ | (0.01) | $ | (0.02) | $ | (0.04) | ||||||||||
FFO, as adjusted for assets sold | $ | 0.34 | $ | 0.51 | $ | 1.03 | $ | 1.50 |
Joseph F. Coradino, Chairman and Chief Executive Officer of PREIT, said, "As we look into 2020, we are beginning to believe that industry headwinds are moderating and the strategic initiatives underway at PREIT will drive growth and value creation. We have taken proactive steps to manage industry-wide disruption, such that today 47% of our non-anchor space is leased to non-mall retail tenants. We have achieved strong momentum in the first five months of operation at Fashion District Philadelphia, and look forward to the continued success of that project."
Coradino added, "Our growing sales and traffic, along with modest same store NOI growth projected amid continued retail market uncertainty, demonstrate that our strategy is working. Further, we believe the capital transactions we are embarking upon demonstrate that the quality of our portfolio provides us with opportunities to efficiently access the capital markets."
Leasing and Redevelopment
Primary Factors Affecting Financial Results for the Three Months Ended December 31, 2019 and December 31, 2018:
All NOI and FFO amounts referenced as primary factors affecting financial results above include our share of unconsolidated properties' revenues and expenses. Additional information regarding changes in operating results for the three months and year ended December 31, 2019 and 2018 is included on page 18.
Asset Dispositions
During the fourth quarter of 2019 and in early 2020, the Company has executed agreements of sale for expected gross proceeds of $312.6 million.
Sale/Leaseback: In February 2020, The Company entered into an agreement of sale for the sale and leaseback of five properties for $153.6 million. Structured as a 99-year lease with an option to repurchase, the agreement provides for release of parcels related to multifamily development and is subject to ongoing lease payments at 7% ($10.75 million) with annual 1.25% escalations. Closing on the transaction is subject to customary closing conditions, including due diligence provisions.
Multifamily Land Parcels: In 2020, the Company executed seven agreements of sale for land parcels for anticipated multifamily development in the amount of $125.3 million. The agreements are with four different buyers across seven properties for 3,450 units as part of Phase I of the Company's previously announced multifamily land sale plan. Closing on the transactions is subject to customary due diligence provisions and securing entitlements.
Outparcels: The Company has executed an agreement of sale with Four Corners Property Trust ("FCPT") for 14 outparcels, generating $29.9 million in total proceeds. We have closed on the sale of four of the parcels, totaling $10.5 million. The remaining 10 are expected to close in 2020 and are subject to customary due diligence provisions.
Hotel Parcels: The Company has executed two agreements of sale conveying land parcels for anticipated hotel development in the amount of $3.8 million. The agreements are with two separate buyers for approximately 250 rooms. Closing on the transactions is subject to customary due diligence provisions and securing entitlements.
2019 and Year-to-Date 2020 Capital Transaction Summary
The table below summarizes 2019 and 2020 capital activity that is expected to impact the Company's liquidity position:
Closed | Under | Total | ||||||||||||
Gainesville Development Parcel | $ | 15,000 | $ | - | $ | 15,000 | ||||||||
New Garden Township Parcel(1) | 8,250 | - | 8,250 | |||||||||||
Wiregrass mortgage loan sale | 8,000 | - | 8,000 | |||||||||||
Whole Foods Parcel(2) | 10,500 | - | 10,500 | |||||||||||
Capital City transaction - incremental capacity(3) | 40,000 | - | 40,000 | |||||||||||
Gloucester Premium Outlets Parcel | 937 | - | 937 | |||||||||||
Fashion District Philadelphia Term Loan expansion (4) | 25,500 | - | 25,500 | |||||||||||
Valley View Mall Outparcel Sale | 1,400 | - | 1,400 | |||||||||||
Sale of Multiple Outparcels (5) | 4,000 | 8,000 | 12,000 | |||||||||||
Sale of Land Parcels related to Hotel Development | - | 3,750 | 3,750 | |||||||||||
Sale of Land Parcels for Multifamily Development | - | 125,337 | 125,337 | |||||||||||
Sale Leaseback transaction (5 malls) (5) | - | 57,000 | 57,000 | |||||||||||
Total | $ | 113,587 | $ | 194,087 | $ | 307,674 | ||||||||
(1) Represents cash proceeds; does not include $2.8 million of preferred stock received by the Company. | ||||||||||||||
(2) Represents the net liquidity to the Company after adjusting for line capacity. Sale price was $22.1 million. | ||||||||||||||
(3) Represents the Company's approximate incremental borrowing capacity by the end of 2019, net of the Capital City mortgage loan defeasance. | ||||||||||||||
(4) Represents the Company's share of amounts available under the expanded capacity of the Fashion District Philadelphia term loan. | ||||||||||||||
(5) Represents the net liquidity to the Company after adjusting for line capacity. | ||||||||||||||
Retail Operations
The following table sets forth information regarding sales per square foot in the Company's mall portfolio, including unconsolidated properties:
A reconciliation of portfolio sales per square foot (1) for the Core Mall portfolio can be found below:
Comp store sales for the year ended December 31, 2018 | $ | 510 | |
Organic sales growth | 14 | ||
Impact of non-core malls | 15 | ||
Comp store sales for the year ended December 31, 2019 | $ | 539 | |
(1) Based on reported sales by all comparable non-anchor tenants that lease individual spaces of less than 10,000 square feet and have occupied the space for at least 24 months. |
2020 Outlook
The Company is introducing its earnings guidance for the year ending December 31, 2020 of GAAP Net loss between ($0.68) and ($0.43) per diluted share and estimates FFO for the year will be between $1.04 and $1.28 per diluted share. FFO, as adjusted per share is expected to be between $1.04 and $1.28.
A reconciliation between GAAP net loss and FFO is as follows:
2020 Guidance Range | ||||||||
(Estimates per diluted share) | Low | High | ||||||
Net loss attributable to common shareholders | $ | (0.68) | $ | (0.43) | ||||
Depreciation and amortization, non-controlling interest and other | 1.72 | 1.71 | ||||||
FFO per share | $ | 1.04 | $ | 1.28 | ||||
Adjustments | - | - | ||||||
FFO per share, as adjusted | $ | 1.04 | $ | 1.28 |
Guidance Assumptions:
Our guidance incorporates the following assumptions, among others:
Our 2020 guidance is based on our current assumptions and expectations about market conditions, our projections regarding occupancy, retail sales and rental rates, and planned capital spending. Our guidance is forward-looking, and is subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements.
Conference Call Information
Management has scheduled a conference call for 11:00 a.m. Eastern Time on Wednesday, February 26, 2020, to review the Company's results and future outlook. To listen to the call, please dial 1-844-885-9139 (domestic toll free), or 1-647-689-4441 (international), and request to join the PREIT call, Conference ID 7187207, at least five minutes before the scheduled start time. Investors can also access the call in a "listen only" mode via the internet at the Company's website, preit.com. Please allow extra time prior to the call to visit the site and download the necessary software to listen to the Internet broadcast. Financial and statistical information expected to be discussed on the call will also be available on the Company's website.
For interested individuals unable to join the conference call, the online archive of the webcast will also be available for one year following the call.
About PREIT
PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the densely-populated eastern U.S. with concentrations in the mid-Atlantic's top MSAs. Since 2012, the Company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures. Additional information is available at www.preit.com or on Twitter or LinkedIn.
Rounding
Certain summarized information in the tables above may not total due to rounding.
Definitions
Funds From Operations (FFO)
The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO, which is a non-GAAP measure commonly used by REITs, as net income (computed in accordance with GAAP) excluding (i) depreciation and amortization related to real estate, (ii) gains and losses from the sale of certain real estate assets, (iii) gains and losses from change in control, and (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We compute FFO in accordance with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently than we do.
FFO is a commonly used measure of operating performance and profitability among REITs. We use FFO and FFO per diluted share and unit of limited partnership interest in our operating partnership ("OP Unit") and, when applicable, related measures such as Funds From Operations, as adjusted, in measuring our performance against our peers and as one of the performance measures for determining incentive compensation amounts earned under certain of our performance-based executive compensation programs.
FFO does not include gains and losses on sales of operating real estate assets or impairment write downs of depreciable real estate, which are included in the determination of net income in accordance with GAAP. Accordingly, FFO is not a comprehensive measure of our operating cash flows. In addition, since FFO does not include depreciation on real estate assets, FFO may not be a useful performance measure when comparing our operating performance to that of other non-real estate commercial enterprises. We compensate for these limitations by using FFO in conjunction with other GAAP financial performance measures, such as net income and net cash provided by operating activities, and other non-GAAP financial performance measures, such as NOI. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that net income is the most directly comparable GAAP measurement to FFO.
When applicable, we also present Funds From Operations, as adjusted, and Funds From Operations per diluted share and OP Unit, as adjusted, which are non-GAAP measures, to show the effect of such items as gain or loss on debt extinguishment (including accelerated amortization of financing costs), impairment of assets, provision for employee separation expense, and insurance recoveries or losses, net, which can have a significant effect on our results of operations, but are not, in our opinion, indicative of our operating performance. We also present FFO on a further adjusted basis to isolate the impact on FFO caused by property dispositions.
We believe that FFO is helpful to management and investors as a measure of operating performance because it excludes various items included in net income that do not relate to or are not indicative of operating performance, such as gains on sales of operating real estate and depreciation and amortization of real estate, among others. We believe that Funds From Operations, as adjusted, is helpful to management and investors as a measure of operating performance because it adjusts FFO to exclude items that management does not believe are indicative of our operating performance, such as provision for employee separation expense, loss on debt extinguishment (including accelerated amortization of financing costs) and insurance losses and recoveries.
Net Operating Income ("NOI")
NOI (a non-GAAP measure) is derived from real estate revenue (determined in accordance with GAAP, including lease termination revenue), minus property operating expenses (determined in accordance with GAAP), plus our pro rata share of revenue and property operating expenses of our unconsolidated partnership investments. NOI does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity. It is not indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that NOI is helpful to management and investors as a measure of operating performance because it is an indicator of the return on property investment, and provides a method of comparing property performance over time. We believe that net income is the most directly comparable GAAP measurement to NOI.
NOI excludes other income, general and administrative expenses, provision for employee separation expenses, interest expense, depreciation and amortization, impairment of assets, gains/adjustments to gains on sale of interest in non operating real estate, gain/adjustments to gain on sale of interest in real estate by equity method investee, gains/losses on sales of interests in real estate, net, project costs, gain or loss on debt extinguishment, insurance losses or recoveries, net and other expenses.
Same Store NOI is calculated using retail properties owned for the full periods presented and excludes properties acquired, disposed, under redevelopment or designated as non-core during the periods presented. In 2018, Wyoming Valley Mall was designated as non-core. In 2019, Exton Square and Valley View Malls were designated as non-core and are excluded from Same Store NOI. Non Same Store NOI is calculated using the retail properties excluded from the calculation of Same Store NOI.
Financial Information of our Unconsolidated Properties
The non-GAAP financial measures of FFO and NOI presented in this press release incorporate financial information attributable to our share of unconsolidated properties. This proportionate financial information is also non-GAAP financial information, but we believe that it is helpful information because it reflects the proportionate contribution from our unconsolidated properties that are owned through investments accounted for under GAAP using the equity method of accounting. Under such method, earnings from these unconsolidated partnerships are recorded in our statements of operations prepared in accordance with GAAP under the caption entitled "Equity in income of partnerships."
To derive the proportionate financial information from our unconsolidated properties, we multiplied the percentage of our economic interest in each partnership on a property-by-property basis by each line item. Under the partnership agreements relating to our current unconsolidated partnerships with third parties, we own a 25% to 50% economic interest in such partnerships, and there are generally no provisions in such partnership agreements relating to special non-proportionate allocations of income or loss, and there are no preferred or priority returns of capital or other similar provisions. While this method approximates our indirect economic interest in our pro rata share of the revenue and expenses of our unconsolidated partnerships, we do not have a direct legal claim to the assets, liabilities, revenues or expenses of the unconsolidated partnerships beyond our rights as an equity owner in the event of any liquidation of such entity. Our percentage ownership is not necessarily indicative of the legal and economic implications of our ownership interest. Accordingly, NOI and FFO results based on our share of the results of unconsolidated partnerships do not represent cash generated from our investments in these partnerships.
Core Properties
Core Properties include all operating retail properties except for Exton Square Mall, Valley View Mall and Fashion District Philadelphia. Core Malls excludes these properties, power centers and Gloucester Premium Outlets.
Forward Looking Statements
This press release contains certain forward-looking statements that can be identified by the use of words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "project" or similar expressions. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect our current views about future events, achievements or results and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements. In particular, our business might be materially and adversely affected by the following:
Additional factors that might cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed herein and in our Annual Report on Form 10-K for the year ended December 31, 2018 in the section entitled "Item 1A. Risk Factors", our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019 in the section entitled "Item 1A. Risk Factors" and any subsequent reports we may file with the SEC. We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.
** Quarterly supplemental financial and operating **
** information will be available on www.preit.com **
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
(in thousands of dollars) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
REVENUE: | ||||||||||||||||
Real estate revenue: | ||||||||||||||||
Lease revenue | $ | 78,643 | $ | 85,162 | $ | 302,311 | $ | 324,829 | ||||||||
Expense reimbursements | 4,637 | 5,014 | 19,979 | 21,322 | ||||||||||||
Other real estate revenue | 5,049 | 5,149 | 12,668 | 12,078 | ||||||||||||
Total real estate revenue | 88,329 | 95,325 | 334,958 | 358,229 | ||||||||||||
Other income | 393 | 717 | 1,834 | 4,171 | ||||||||||||
Total revenue | 88,722 | 96,042 | 336,792 | 362,400 | ||||||||||||
EXPENSES: | ||||||||||||||||
Operating expenses: | ||||||||||||||||
Property operating expenses: | ||||||||||||||||
CAM and real estate taxes | (27,369) | (28,666) | (113,260) | (113,235) | ||||||||||||
Utilities | (3,383) | (3,847) | (14,733) | (15,990) | ||||||||||||
Other property operating expenses | (2,750) | (3,257) | (8,565) | (12,007) | ||||||||||||
Total property operating expenses | (33,502) | (35,770) | (136,558) | (141,232) | ||||||||||||
Depreciation and amortization | (39,699) | (32,611) | (137,784) | (133,116) | ||||||||||||
General and administrative expenses | (12,591) | (10,373) | (46,010) | (38,342) | ||||||||||||
Provision for employee separation expenses | (2,611) | (183) | (3,689) | (1,139) | ||||||||||||
Insurance recoveries, net | (132) | 714 | 4,362 | 689 | ||||||||||||
Project costs and other expenses | (17) | (252) | (284) | (693) | ||||||||||||
Total operating expenses | (88,552) | (78,475) | (319,963) | (313,833) | ||||||||||||
Interest expense, net | (17,001) | (15,291) | (63,987) | (61,355) | ||||||||||||
Gain on debt extinguishment, net | 27 | - | 24,859 | - | ||||||||||||
Impairment of assets | (3,553) | (103,201) | (3,553) | (137,487) | ||||||||||||
Impairment of development land parcel | - | - | (1,464) | - | ||||||||||||
Total expenses | (109,079) | (196,967) | (364,108) | (512,675) | ||||||||||||
Loss before equity in income of partnerships, gain on sales of | (20,357) | (100,925) | (27,316) | (150,275) | ||||||||||||
Equity in income of partnerships | 2,153 | 3,189 | 8,289 | 11,375 | ||||||||||||
Gain on sales of real estate by equity method investee | — | — | 553 | 2,772 | ||||||||||||
Gain on sales of real estate, net | 72 | 975 | 2,744 | 1,722 | ||||||||||||
Gain on sales of interests in non operating real estate | 2,718 | 8,126 | 2,718 | 8,126 | ||||||||||||
Adjustment to gain on sales of interests in non operating real | — | (199) | 12 | (223) | ||||||||||||
Net loss | (15,414) | (88,834) | (13,000) | (126,503) | ||||||||||||
Less: net loss attributable to noncontrolling interest | 565 | 10,052 | 2,128 | 16,174 | ||||||||||||
Net loss attributable to PREIT | (14,849) | (78,782) | (10,872) | (110,329) | ||||||||||||
Less: preferred share dividends | (6,844) | (6,844) | (27,375) | (27,375) | ||||||||||||
Net loss attributable to PREIT common shareholders | $ | (21,693) | $ | (85,626) | $ | (38,247) | $ | (137,704) |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
(in thousands, except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net loss | $ | (15,414) | $ | (88,834) | $ | (13,000) | $ | (126,503) | ||||||||
Noncontrolling interest | 565 | 10,052 | 2,128 | 16,174 | ||||||||||||
Preferred share dividends | (6,844) | (6,844) | (27,375) | (27,375) | ||||||||||||
Dividends on unvested restricted shares | (219) | (130) | (883) | (542) | ||||||||||||
Net loss used to calculate loss per share—basic and diluted | $ | (21,912) | $ | (85,756) | $ | (39,130) | $ | (138,246) | ||||||||
Basic and diluted loss per share: | $ | (0.29) | $ | (1.23) | $ | (0.52) | $ | (1.98) | ||||||||
(in thousands of shares) | ||||||||||||||||
Weighted average shares outstanding—basic | 76,557 | 69,840 | 75,221 | 69,749 | ||||||||||||
Effect of common share equivalents(1) | - | - | - | - | ||||||||||||
Weighted average shares outstanding—diluted | 76,557 | 69,840 | 75,221 | 69,749 |
(1) | The Company had net losses for the three months and the year ended December 31, 2019 and 2018, respectively, therefore, the effects of common share equivalents are excluded from the calculation of diluted loss per share for these periods because they would be antidilutive. |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
(in thousands of dollars) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Comprehensive income (loss): | ||||||||||||||||
Net loss | $ | (15,414) | $ | (88,834) | $ | (13,000) | $ | (126,503) | ||||||||
Unrealized (loss) gain on derivatives | 2,903 | (12,417) | (18,937) | (2,755) | ||||||||||||
Amortization of settled swaps | 3 | 2 | 85 | 721 | ||||||||||||
Total comprehensive loss | (12,508) | (101,249) | (31,852) | (128,537) | ||||||||||||
Less: comprehensive loss attributable to noncontrolling | 491 | 11,370 | 3,016 | 16,390 | ||||||||||||
Comprehensive loss attributable to PREIT | $ | (12,017) | $ | (89,879) | $ | (28,836) | $ | (112,147) |
The following table presents a reconciliation of net income (loss) determined in accordance with GAAP to (i) Funds from operations attributable to common shareholders and OP Unit holders, (ii) Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders, (iii) Funds from operations, as adjusted for assets sold, (iv) Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit, (v) Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit, and (vi) Funds from operations, as adjusted for assets sold per diluted share and OP Unit for the three months and the year ended December 31, 2019 and 2018, respectively: |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
(in thousands, except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net loss | $ | (15,414) | $ | (88,834) | $ | (13,000) | $ | (126,503) | ||||||||
Depreciation and amortization on real estate: | ||||||||||||||||
Consolidated properties | 39,296 | 32,265 | 136,422 | 131,694 | ||||||||||||
PREIT's share of equity method investments | 3,421 | 2,095 | 9,874 | 8,612 | ||||||||||||
Gain on sales of real estate by equity method investee | - | - | - | (2,772) | ||||||||||||
Gain on sales of interests in real estate, net | (72) | (776) | (2,756) | (1,525) | ||||||||||||
Impairment of assets | 1,455 | 95,079 | 1,455 | 129,365 | ||||||||||||
Preferred share dividends | (6,844) | (6,844) | (27,375) | (27,375) | ||||||||||||
Funds from operations attributable to common | $ | 21,842 | $ | 32,985 | $ | 104,620 | $ | 111,496 | ||||||||
Gain on debt extinguishment, net | (27) | - | (24,859) | - | ||||||||||||
Impairment of mortgage note receivable | - | 8,122 | - | 8,122 | ||||||||||||
Accelerated amortization of financing costs | - | - | - | 363 | ||||||||||||
Impairment of development land parcel | 2,098 | - | 3,562 | - | ||||||||||||
Provision for employee separation expenses | 2,611 | 183 | 3,689 | 1,139 | ||||||||||||
Insurance recoveries, net | 132 | (714) | (4,362) | (689) | ||||||||||||
Funds from operations, as adjusted, attributable to | $ | 26,656 | $ | 40,576 | $ | 82,650 | $ | 120,431 | ||||||||
Less: Funds from operations from assets sold in 2019 and | - | (666) | (666) | (311) | ||||||||||||
Funds from operations, as adjusted for assets sold | $ | 26,656 | $ | 39,910 | $ | 81,984 | $ | 120,120 | ||||||||
Funds from operations attributable to common | $ | 0.28 | $ | 0.42 | $ | 1.33 | $ | 1.43 | ||||||||
Funds from operations, as adjusted, attributable to | $ | 0.34 | $ | 0.52 | $ | 1.05 | $ | 1.54 | ||||||||
Funds from operations, as adjusted for assets sold per | $ | 0.34 | $ | 0.51 | $ | 1.04 | $ | 1.54 | ||||||||
(in thousands of shares) | ||||||||||||||||
Weighted average number of shares outstanding | 76,557 | 69,840 | 75,221 | 69,749 | ||||||||||||
Weighted average effect of full conversion of OP Units | 2,023 | 8,273 | 3,221 | 8,273 | ||||||||||||
Effect of common share equivalents | 485 | 23 | 453 | 203 | ||||||||||||
Total weighted average shares outstanding, including OP | 79,065 | 78,136 | 78,895 | 78,225 |
NOI for the three months ended December 31, 2019 and 2018: | ||||||||||||||||||||||||||||||||
Same Store | Change | Non Same Store | Total | |||||||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
NOI from consolidated properties | $ | 52,664 | $ | 54,597 | $ | (1,933) | -3.5% | $ | 2,162 | $ | 4,958 | $ | 54,826 | $ | 59,555 | |||||||||||||||||
NOI attributable to equity method | 7,451 | 7,880 | (429) | -5.4% | 923 | 95 | 8,374 | 7,975 | ||||||||||||||||||||||||
Total NOI | 60,115 | 62,477 | (2,362) | -3.8% | 3,085 | 5,053 | 63,200 | 67,530 | ||||||||||||||||||||||||
Less: lease termination revenue | 1,018 | 1,575 | (557) | -35.4% | 1 | - | 1,019 | 1,575 | ||||||||||||||||||||||||
Total NOI excluding lease termination | $ | 59,097 | $ | 60,902 | $ | (1,805) | -3.0% | $ | 3,084 | $ | 5,053 | $ | 62,181 | $ | 65,955 |
NOI for the year ended December 31, 2019 and 2018: | ||||||||||||||||||||||||||||||||
Same Store | Change | Non Same Store | Total | |||||||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
NOI from consolidated properties | $ | 185,874 | $ | 196,836 | $ | (10,962) | -5.6% | $ | 12,526 | $ | 20,163 | $ | 198,400 | $ | 216,999 | |||||||||||||||||
NOI attributable to equity method | 28,597 | 30,161 | (1,564) | -5.2% | 732 | 572 | 29,329 | 30,733 | ||||||||||||||||||||||||
Total NOI | 214,471 | 226,997 | (12,526) | -5.5% | 13,258 | 20,735 | 227,729 | 247,732 | ||||||||||||||||||||||||
Less: lease termination revenue | 1,531 | 8,641 | (7,110) | -82.3% | 18 | 577 | 1,549 | 9,218 | ||||||||||||||||||||||||
Total NOI excluding lease termination | $ | 212,940 | $ | 218,356 | $ | (5,416) | -2.5% | $ | 13,240 | $ | 20,158 | $ | 226,180 | $ | 238,514 |
The table below reconciles net loss to NOI of our consolidated properties for the three months and the year ended December 31, 2019 and | ||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
(in thousands of dollars) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net loss | $ | (15,414) | $ | (88,834) | $ | (13,000) | $ | (126,503) | ||||||||
Other income | (393) | (717) | (1,834) | (4,171) | ||||||||||||
Depreciation and amortization | 39,699 | 32,611 | 137,784 | 133,116 | ||||||||||||
General and administrative expenses | 12,591 | 10,373 | 46,010 | 38,342 | ||||||||||||
Insurance recoveries, net | 132 | (714) | (4,362) | (689) | ||||||||||||
Provision for employee separation expense | 2,611 | 183 | 3,689 | 1,139 | ||||||||||||
Project costs and other expenses | 17 | 252 | 284 | 693 | ||||||||||||
Interest expense, net | 17,001 | 15,291 | 63,987 | 61,355 | ||||||||||||
Impairment of assets | 3,553 | 103,201 | 3,553 | 137,487 | ||||||||||||
Impairment of development land parcel | - | - | 1,464 | - | ||||||||||||
Gain on debt extinguishment, net | (27) | - | (24,859) | - | ||||||||||||
Equity in income of partnerships | (2,153) | (3,189) | (8,289) | (11,375) | ||||||||||||
Gain on sales of real estate by equity method | - | - | (553) | (2,772) | ||||||||||||
Gain on sales of interests in real estate, net | (72) | (776) | (2,756) | (1,525) | ||||||||||||
Gain on sales of interest in non operating real | (2,718) | (8,126) | (2,718) | (8,100) | ||||||||||||
NOI from consolidated properties | $ | 54,827 | $ | 59,555 | $ | 198,400 | $ | 216,997 | ||||||||
Less: Non Same Store NOI of consolidated | 2,162 | 4,958 | 12,526 | 20,162 | ||||||||||||
Same Store NOI from consolidated properties | $ | 52,665 | $ | 54,597 | $ | 185,874 | $ | 196,835 | ||||||||
Less: Same Store lease termination revenue | 963 | 1,563 | 1,426 | 8,152 | ||||||||||||
Same Store NOI excluding lease termination | $ | 51,702 | $ | 53,034 | $ | 184,448 | $ | 188,683 |
The table below reconciles equity in income of partnerships to NOI of equity method investments at ownership share for the three months | ||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Equity in income of partnerships | $ | 2,153 | $ | 3,189 | $ | 8,289 | $ | 11,375 | ||||||||
Other income | (29) | (46) | (77) | (82) | ||||||||||||
Depreciation and amortization | 3,421 | 2,095 | 9,874 | 8,612 | ||||||||||||
Interest and other expenses | 2,829 | 2,737 | 11,244 | 10,828 | ||||||||||||
Net operating income from equity method | $ | 8,374 | $ | 7,975 | $ | 29,330 | $ | 30,733 | ||||||||
Less: Non Same Store NOI from equity method | 923 | 95 | 732 | 573 | ||||||||||||
Same Store NOI of equity method investments | $ | 7,451 | $ | 7,880 | $ | 28,598 | $ | 30,160 | ||||||||
Less: Same Store lease termination revenue | 55 | 12 | 105 | 489 | ||||||||||||
Same Store NOI from equity method | $ | 7,396 | $ | 7,868 | $ | 28,493 | $ | 29,671 |
December 31, | ||||||||
2019 | 2018 | |||||||
(in thousands of dollars) | ||||||||
ASSETS: | ||||||||
INVESTMENTS IN REAL ESTATE, at cost: | ||||||||
Operating properties | $ | 3,100,530 | $ | 3,063,531 | ||||
Construction in progress | 106,028 | 115,182 | ||||||
Land held for development | 5,881 | 5,881 | ||||||
Total investments in real estate | 3,212,439 | 3,184,594 | ||||||
Accumulated depreciation | (1,205,868) | (1,118,582) | ||||||
Net investments in real estate | 2,006,571 | 2,066,012 | ||||||
INVESTMENTS IN PARTNERSHIPS, at equity: | 159,993 | 131,124 | ||||||
OTHER ASSETS: | ||||||||
Cash and cash equivalents | 12,211 | 18,084 | ||||||
Tenant and other receivables, net | 41,556 | 38,914 | ||||||
Intangible assets | 14,541 | 17,868 | ||||||
Deferred costs and other assets, net | 103,889 | 110,805 | ||||||
Assets held for sale | 12,506 | 22,307 | ||||||
Total assets | $ | 2,351,267 | $ | 2,405,114 | ||||
LIABILITIES: | ||||||||
Mortgage loans payable, net | $ | 899,753 | $ | 1,047,906 | ||||
Term Loans, net | 548,025 | 547,289 | ||||||
Revolving Facilities | 255,000 | 65,000 | ||||||
Tenants' deposits and deferred rent | 13,006 | 15,400 | ||||||
Distributions in excess of partnership investments | 87,916 | 92,057 | ||||||
Fair value of derivative liabilities | 13,126 | 3,010 | ||||||
Accrued expenses and other liabilities | 107,016 | 87,901 | ||||||
Total liabilities | 1,923,842 | 1,858,563 | ||||||
EQUITY: | ||||||||
Total equity | 427,425 | 546,551 | ||||||
Total liabilities and equity | $ | 2,351,267 | $ | 2,405,114 |
Changes in Funds from Operations for the three months and the year ended December 31, 2019 as compared to the three months and the | ||||||||||||||||
(in thousands, except per share amounts) | Three Months Ended December 31, 2019 | Per Diluted Share and OP Unit | Year Ended December 31, 2019 | Per Diluted Share and OP Unit | ||||||||||||
Funds from Operations, as adjusted December 31, | $ | 40,576 | $ | 0.52 | $ | 120,431 | $ | 1.54 | ||||||||
Changes - Q4 2018 to Q4 2019 | ||||||||||||||||
Contribution from anchor replacements and new box tenants | 888 | 0.010 | 2,918 | 0.035 | ||||||||||||
Impact from 2019 bankruptcies | (2,214) | (0.030) | (5,653) | (0.070) | ||||||||||||
Other leasing activity, including base rent and net | 206 | 0.005 | (1,682) | (0.020) | ||||||||||||
Lease termination revenue | (600) | (0.010) | (6,726) | (0.085) | ||||||||||||
Credit losses | (237) | (0.005) | (378) | (0.005) | ||||||||||||
Other | 24 | - | 560 | 0.005 | ||||||||||||
Same Store NOI from unconsolidated properties | (429) | (0.005) | (1,563) | (0.020) | ||||||||||||
Same Store NOI | (2,362) | (0.030) | (12,524) | (0.160) | ||||||||||||
Non Same Store NOI | (1,968) | (0.025) | (7,476) | (0.095) | ||||||||||||
Dilutive effect of asset sales | (666) | (0.010) | (1,087) | (0.015) | ||||||||||||
General and administrative expenses | (858) | (0.010) | (1,552) | (0.020) | ||||||||||||
Capitalization of leasing costs | (1,360) | (0.015) | (6,116) | (0.080) | ||||||||||||
Gain on sales of non-operating real estate | (5,408) | (0.070) | (5,383) | (0.070) | ||||||||||||
Other | 395 | 0.005 | (1,118) | (0.015) | ||||||||||||
Interest expense, net | (1,692) | (0.020) | (2,525) | (0.030) | ||||||||||||
Increase in weighted average shares | - | (0.005) | - | (0.005) | ||||||||||||
Funds from Operations, as adjusted December 31, | $ | 26,657 | $ | 0.34 | $ | 82,650 | $ | 1.05 | ||||||||
Insurance recoveries, net | (132) | - | 4,362 | 0.055 | ||||||||||||
Gain on debt extinguishment, net | 27 | - | 24,859 | 0.320 | ||||||||||||
Impairment of assets | (2,098) | (0.025) | (2,098) | (0.025) | ||||||||||||
Impairment of development land parcel | - | - | (1,464) | (0.020) | ||||||||||||
Provision for employee separation expense | (2,611) | (0.035) | (3,689) | (0.045) | ||||||||||||
Funds from Operations December 31, 2019 | $ | 21,843 | $ | 0.28 | $ | 104,620 | $ | 1.33 |
CONTACT: AT THE COMPANY
Mario Ventresca
EVP & CFO
(215) 875-0703
Heather Crowell
EVP, Strategy and Communications
(215) 454-1241
heather.crowell@preit.com
View original content to download multimedia:http://www.prnewswire.com/news-releases/preit-reports-fourth-quarter-and-full-year-2019-results-and-provides-balance-sheet-strategy-update-301011297.html
SOURCE PREIT
Copyright 2020 PR Newswire
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